UK Houses in Multiple Occupation Guide
If a property is to be let to multiple occupiers who are not a family unit, the local authorities may class it as an HMO. This type of rental property can be an excellent investment opportunity, but they are subject to additional regulation, licensing, and inspections for the safety of the occupants.
A rented property is considered a House in Multiple Occupation if it is occupied by three or more people who share facilities such as the kitchen or bathroom, who form two or more 'households'. It’s sometimes called a ‘house share’. We also recommend that you seek guidance from your local authority about what they consider to be an HMO.
HMOs can produce much higher rental yields than traditional rental properties. Demand for shared living accommodation is usually robust, due to tenants seeking affordable accommodation. When one tenant moves out, you still have several others paying rent while you find a replacement for the vacant room, so the impact of voids is reduced.
Whilst the benefits are numerous, more tenants in one property means more tenancy agreements - and the nature of a house-share may mean that tenants may be likely to move-on more frequently. This means that HMOs can require more hands-on management than other rental properties - and a good letting agent can help you deal with this.