What is a House of Multiple Occupancy (HMO)?

A House of Multiple Occupancy is a type of property that accommodates at least three tenants who are not from one ‘household’ and share living spaces, such as bathrooms, kitchens, and living rooms. An HMO property is usually occupied by a group of individuals who do not share a household, but instead, share the property’s common spaces.

Definition of a Household

Investing in House of Multiple Occupancy can be a lucrative venture, but it’s important to understand the number of households present in the property. This information is crucial in determining the eligibility of the property as an HMO, and is also important for the landlord in terms of managing the property and ensuring compliance with local regulations.

A household refers to a group of people who live together as a single unit, sharing living spaces and expenses. The term ‘household’ is often used to define who is eligible to live in a property, and is usually based on familial or relationship ties.

Examples of a Household

 
Family:
A family is considered a single household if they live together and share living spaces and expenses. This can include a married couple, parents, and children, or multiple generations of a family.

Couple:
A couple who live together and share living spaces and expenses are also considered a household.

What are Not Considered a Household?

 
Roommates:
Individuals who rent a property and share living spaces but are not related or in a romantic relationship are not considered a household.

Number of Households

Let’s take a look at the number of households in the following examples:

Example 1:
Three couples residing in one house, each sharing a separate room.

In this example, there are three households present in the property. Each household is made up of a couple and they each have their own separate room.

Example 2:
A family of four with two children sharing a three-bedroom house.

In this example, there is one household present in the property. The household is made up of a family of four, including two children.

Example 3:
Three individuals, each renting a room in a shared house.

In this example, there are three households present in the property. Each household is made up of an individual tenant who has rented a separate room.

Example 4:
Two couples, each sharing a room in a two-bedroom house.

In this example, there are two households present in the property. Each household is made up of a couple and they each share a separate room.

Example 5:
A single tenant renting a room in a family house.

In this example, there are two households present in the property. The household is made up of a family and a single tenant who has rented a room.

Example 6:
2 sisters each in their own room and a couple renting another room.

In this example, there are two households present in the property. One household is made up of two sisters, and the other household is made up of a couple.

Conclusion

Investing in a House of Multiple Occupancy can be a great opportunity, with the potential for high rental yields and capital growth. As a UK property investor, it’s crucial to do your research and understand the HMO market before making an investment. Understanding the definition of a household, and how many households will live in your property, is essential for identifying the potential of an HMO.

For expert HMO management and HMO letting services for your South London HMO property or professional HMO consultation, contact us today.