With burgeoning numbers of students and a continuing housing shortage, residential property for letting has been a popular investment for several years.

Many such investments are in houses in multiple occupation (HMOs) and landlords of large HMOs (which are properties of three or more storeys that are occupied by five or more people who are not from one household who share basic amenities) are required to be licensed and to comply with a regulatory regime that covers such aspects as the safety of the property, the provision of washing and cooking facilities and other matters.

A new definition of HMO comes into force on 1 October 2018, which it is calculated will bring another 177,000 properties into the HMO category. The changes are being incorporated into the Housing Act 2004 with an 18-month ‘roll-out’ period for compliance. There will also be tight requirements relating to room size and occupancy, though the implementation dates and exact rules are not yet finalised.

The changes will mean that any property which is occupied by five or more people forming two or more households will be an HMO and require a mandatory licence where it is the main residence of people who share basic amenities.

If you are the owner of an HMO and currently licensed, the existing licence will continue to be valid until it expires. However, if you let property that will be an HMO under the new regime but is not currently licensed as such, you will need to apply for a licence, which will necessitate complying with the relevant regulations.