How to organise Houses in Multiple Occupation (HMO)

Posted in Blog

Houses in Multiple Occupancy are a great source of income for landlords, However there are a number of aspects that need to be considered before starting your HMO journey. We have prepared this Checklist in conjuntion with This document will help you identify whether the investment property is in fact a HMO and what steps need to followed if you want to raise a mortgage to acquire or refinance one.


How to Organise Houses in Multiple Occupation (HMOs) Finance Checklist Done


Your property is probably an HMO if:

  • Three or more unrelated people live there, as at least two separate households - for
    example, three single people with their own rooms or two couples each sharing a room

  • The people living there share basic amenities - for example a kitchen and/or a bathroom


Types of HMOs

  • A house split into separate bedsits

  • A shared house or flat, where the sharers are not members of the same family

  • A hostel

  • A bed and breakfast that is not just for holidays

  • Shared accommodation for students


Licence requirement if the property is:-

  • At least three storeys high

  • Has five or more unrelated people living there

  • Has two or more separate households living there

  • Some councils also require other HMOs to be licensed

  • The licence will cover such areas as:-

      • Fire safety

      • Lighting

      • Ventilation

      • Washing facilities

      • Cooking facilities

      • Management standards



  • Determine target market

  • Transport, buses, trains, commuter route

  • Close to a university or hospital

  • Demand and supply in the area



  • Gross yield versus net yield

  • Is your broker FCA regulated?

  • Is your broker a full member of the National Association of Commercial Finance Brokers?

  • Experienced HMO landlord?



  • Bricks & Mortar Value - where a property is valued in accordance with its neighbouring

  • Investment Value - where a property is valued on its investment value or a multiple of
    its income


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