Having Lodgers/Unwittingly becoming a HMO

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    Having Lodgers/Unwittingly becoming a HMO

    Hello all,

    I'm new to the forum in the hopes to sponge up as much wisdom as I can - and it's a new sponge at that, with nary a drop of moisture in it.

    So essentially, my girlfriend and have I have taken it upon ourselves to aim for the mortgage death-pledge. It will be a residential mortgage, but I am already thinking more long-term and want to ideally use the place as a baby-step into land-lording later in life. Ideally, I want to get a 3 bedroom place minimum, and once ready and settled, have a lodger or two live with us. From cursory research, I understand this is legal provided we also live in the property of course.

    However, I am also aware that too many lodgers can define the property as an HMO...This is the point that I'm just curious about.

    Just taking an extract from an article: "Under the Housing Act 2004, a property is classed as an HMO if there are three or more occupiers who form two or more households and who share a kitchen, bathroom or toilet.

    A household is generally a family unit."

    My concern is that it would be me and my girlfriend might count as separate households. I don't know if by both of us owning the mortgage as it were, we would count or not towards the count? Say for example, me and my gf in one bedroom, and then a friend/stranger in the other two rooms.
    Totally new to all of this. Just here to ask lots and lots of questions!

    #2
    As a live-in landlord, you are allowed two ‘non-family’ lodgers before your property can be classed as an HMO. Your g/f will depend if she is a owner or whether or not she will be paying rent to you if she is not part owner.

    Comment


      #3
      Originally posted by ash72 View Post
      As a live-in landlord, you are allowed two ‘non-family’ lodgers before your property can be classed as an HMO. Your g/f will depend if she is a owner or whether or not she will be paying rent to you if she is not part owner.
      The live in owner exception would apply here, because your girlfriend would be part of your household regardless of the ownership.

      It's going to be academic, though, because if you're both on the mortgage, you will both have to be owners of the property being mortgaged.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        As others have said, live in exception will apply.Letting out rooms in my own flat is exactly how I started out - I had a three bed and let two rooms. Later when in a relationship five of us shared a four bedroom flat (either HMO rules did not exist or I was ignorant of them).

        ​​​​​​​It was at times great fun and at times moderately trying. Unless it is huge I'd think about starting by letting one room and keeping two bedrooms for yourselves so that you all have private space to get away from eachother (in the nicest possible way)! The layout and size of your property will have a huge impact on how tolerable it is to live with lodgers. My 4 bed was 1,400sqft, everyone had double rooms and my partner and I had a floor to ourselves. I continued letting rooms for a while after I could afford not to as I mostly enjoyed it. It is a good way to get on the ladder for if you are suited to co-living - but definitely not for everyone.

        After I moved out of the 4 bed I turned it into 2.5 flats (half combined with another property) so it's worth thinking about the development angle even if that is not right for now.
        Assume I know nothing.

        Comment


          #5
          Thanks. All of these are great responses!

          Today I had my initial appointment with the bank mortgage-advisor and looks like we are good for the mortgage in principle- just need to save a bit more. I did the raise the question about lodgers with them, but he seemed a bit stumped by the question so he's getting back to me on that...

          And that's a good point as well...I should factor in the sanity aspect of co-habiting, aha
          Totally new to all of this. Just here to ask lots and lots of questions!

          Comment


            #6
            Originally posted by Philomath View Post
            And that's a good point as well...I should factor in the sanity aspect of co-habiting, aha
            In my opinion the quality of life aspect is the first priority, this is YOUR home, be very careful who you pick and be prepared for annoying behavior.

            Comment


              #7

              Taking a lodgers is a brilliant idea. Tax advantages. You will not be subject to Capital Gains Tax.

              As for your second idea. Being a landlord is getting harder and harder. Too many regulations, complications, taxation etc...

              This is the HMO guide from council (different council may have different variations in rules). Read this (for a taste) :


              https://www.stalbans.gov.uk/sites/de...idance%202.pdf

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