Six steps to convert a property into an HMO

Converting a property into a House in Multiple Occupation (HMO) can be a great investment, but it’s important to follow the right steps to make sure everything is legal and safe. This guide will walk you through HMO requirements and the process.

‍Step one: Understand what is required for an HMO

Before beginning the conversion, it’s essential to understand what an HMO is. An HMO is a property rented to three or more tenants who aren't part of the same family but share common areas like kitchens and bathrooms. HMOs are common with students, young professionals, and people looking for affordable shared housing.  

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Step two: Check the HMO licence requirements  

If your property will be rented to five or more tenants who are not from the same household, you’ll need an HMO licence. Each local council has different rules, but generally, you will need to meet these HMO licence requirements:

• Fire safety (such as smoke alarms and fire doors)

• Room size to avoid overcrowding and make sure tenants have enough space

• A background check for landlords or property managers

Check with your local council to see what specific rules apply and apply for the licence before renting the property.  

‍Step three: Comply with building regulations for HMO conversion

When undertaking an HMO conversion, you must follow your local building regulations, which typically include:

• Making sure the property is structurally sound for multiple tenants

• Adding fire exits, smoke alarms, fire doors, and other safety features

• Making any necessary changes to provide enough bathrooms, kitchens, and living space for the number of tenants

Step four: Calculate the HMO conversion costs

HMO conversions can be costly, so it's important to budget properly. Key expenses to consider include:

• Renovation costs: This includes making sure the property meets safety regulations

• Fitting amenities: You’ll need to install kitchens, bathrooms, and shared spaces

• VAT: Some HMO conversions qualify for a reduced five per cent VAT rate  

Step five: Apply for your HMO Licence

Once your property meets the HMO size requirements, and you’ve made the necessary changes, apply for your HMO licence. This involves:

• Submitting an application to your local council

• Providing details of the property, including layout, safety measures, and tenant numbers

• Paying the relevant application fee

Step six: Ongoing compliance and maintenance

After completing the conversion, continue to comply with regulations by:

• Keeping the property in good condition, including regular maintenance of communal areas

• Making sure tenants follow rules, including waste disposal and communal space usage

• Periodic inspections by local authorities to make sure safety standards are met

Find out more on HMO requirements by reading our ultimate guide on letting an HMO property.

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