What is an HMO? | Student Letting

Published: 30/05/2018

It’s Spring. Summer is just around the corner, but so are the A-Level exams, and your every spare moment is spent with your head inside a textbook. Great times could be just around the corner, though. Perhaps you will receive an unconditional offer from a university of your choice, to study the course of your dreams. Soon, it will be time to pack up and leave the comforts of home, for a totally new way of life. Chances are, you’ll be moving into a HMO.

What exactly is a HMO? This is not a term used in everyday speak, however, you more than likely know exactly what one is. HMO stands for ‘House in Multiple Occupation’ AKA, in more common words, a shared house or flat, in which you live with, and share facilities with, people that you aren’t related to. Indeed, in a university context, these could well be people you’ve never even met before!

A property is classified as a HMO if:

  • at least 3 tenants live there, forming more than 1 household
  • you share toilet, bathroom or kitchen facilities with other tenants

Your home is a large HMO if all of the following apply:

  • it’s at least 3 storeys high
  • at least 5 tenants live there, forming more than 1 household
  • you share toilet, bathroom or kitchen facilities with other tenants

A household is either a single person or members of the same family who live together. A family includes people who are:

  • married or living together - including people in same-sex relationships
  • relatives or half-relatives, for example grandparents, aunts, uncles, siblings
  • step-parents and step-children

What are the benefits of living in a HMO?

  • Shared housing is, of course, generally much more affordable.

    If you are replying on student loans or a graduate salary for example, you will probably struggle to live on your own, especially in bigger cities. As such, many younger people choose shared accommodation instead. Likewise, HMOs are an option for workers in expensive locations such as London and families on a budget. You may choose to rent a room in a HMO while you are saving to buy your own property.

  • There’s less hassle.

    Often, bills and other expenses are included in your monthly rent, so budgeting is made more simple. Of course, this will depend on your particular tenancy agreement, so it’s best to check with your landlord or agent. Likewise, the building will be managed by someone else. Your landlord will need to keep your house or apartment in a reasonable condition, repairing things that get broken, and ensuring your living conditions are clean and safe, with no hazards to your health. This can save you time, money and stress.

  • Household responsibilities

    Cleaning and chores can be shared between you and your housemates or, you can put into a kitty, and share the expense of a cleaner.

  • You’ll always have (hopefully, good!) company

    Life is never boring in a HMO, for what it’s worth!

The disadvantages of living in a HMO

  • Personal space

    If you desperately need your own space, beyond your bedroom that is, and don’t like other people touching your stuff, a HMO probably isn’t ideal for you. In many cities, small studios can be affordable too for students or those on a budget.

  • Two words - Landlord troubles

    HMOs are big business these days. Many landlords benefit from significant profits (through multiple rent payments) with little other costs (e.g. less maintenance compared to say, having multiple one-family rental properties). As such, HMOS, especially large HMOs, do sometimes attract less-than-favourable landlords who don’t always follow the strict rules in place to protect tenants. While the law protects tenants, it can be a pain fighting for your rights, if your landlord doesn’t want to play fair!

Investing in a HMO

HMO investment, especially HMOs in London, is a big deal right now.


HMOs, for the many reasons mentioned already, are an ever-popular for tenants seeking cheaper rents, sociable living conditions and desirable inner-city locations. In some cities like London, there is simply not enough space to house everyone in a more private setting, so HMOs just make sense for a whole range of renters.

If done the right way, HMO landlords are in a very favourable position to make some serious profit out of their HMO investment and set themselves up for future life (maybe even without another job!).

In fact, many former HMO letters later choose to invest in a HMO property of their own. These HMO landlords often become very successful, given they have lived in this type of property themselves, and know all the unique requirements that come along with a shared accomodation situation. Former HMO tenants can make great HMO landlords and at the end of the day, if the tenant is happy, so is the landlord!

There is further good news for younger buyers who would like to become landlords. Most major lenders now offer buy-to-let mortgages to first-time buyers. Previously, a buy-to-letproperty than ever before (or at least in recent times!).

The next steps - HMO letting

The absolutely most important thing to do if you are thinking of becoming a landlord, especially with HMO properties, is to seek expert advice.

The rules and regulations, as well a taxation, for these types of landlords is extremely complex and ever-changing. Only expert, specialist property lawyers will have the knowledge to help you make your investment a successful one. You’ll also need good quality advice from a tax advisor.

Even if you are already a HMO landlord, and have been so for several years, you should seek immediately legal and taxation advice. The rules and regulations for HMOs have recently changed, so you may need to make some alterations to your normal operations.

The advice you receive could be the difference between success and failure as a landlord. Trust us, you need it!

Why choose GWlegal?

Our property department has been around for more than 30 years!

Your case will be personally handled by a true expert in the field.

GWlegal also has a five-star Solicitor.Info score based on positive client reviews.

GWlegal also offers:

  • Fixed costs (no hidden fees)
  • 24/7 access to your case and any milestones on our app
  • Milestone updates are now emailed/texted straight to you and your mortgage broker
  • Regular updates by phone and/or in writing from our friendly staff
  • The peace of mind that comes with choosing a solicitor with over 30 years experience

Who are GWlegal?

GWlegal are a property solicitors based in Liverpool, specialising in buying or selling, remortgage, declaration of trust, bridging and buy-to-let landlords.

If you have a legal matter you wish to discuss don’t hesitate to get in touch. You can call us on 0345 373 3737 email us hello@gw.legal with your question.

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Content correct at time of publication.

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