An HMO (house in multiple occupations) is a property that is rented out to three or more unrelated individuals. The people cannot be from the same family, for example. The HMO has a set of shared areas such as a kitchen, utility room, bathroom, and sometimes the living area. To rent out an HMO in the UK you need a license, and you have your property defined as an HMO. The licenses for an HMO last for five years which you will need to update before it expires.

HMO PropertySo, if you would like to understand more about HMOs and how to convert an existing property, also how to invest in an HMO, how to achieve planning permission, and how to achieve the relevant planning permission then this article is for you.

There are specific criteria you need to follow to have your property defined as HMO, such as having a suitable number of occupants. The landlord also needs to be deemed as fit and proper. For example, the landlord cannot have a criminal record or have any breaches of the landlord’s laws and codes of practice.

A local council will give out a license, and you have to be aware of their laws. Beware the fines are unlimited fines for renting out an unlicensed HMO.

How to convert your property to an HMO?

We recommend you have landlord experience before you consider converting a property to an HMO. If you are unable to self-fund your HMO, then landlord experience will make a difference to what brokers will consider you. Another critical area is understanding local planning permission laws for HMOs as fines can be up to £20,000.

According to the regulations for General Permitted Development Order (GDPO) dated the first of October 2010. They are stating that you need to change the use of the property from a C3 Dwelling House to the HMO C4 status type.

Councils are starting to withdraw permitted HMO developments that are not being kept up to proper standards. However, there are other reasons councils are becoming stricter.

These include:

  • Loss of local character.
  • Noise complaints.
  • Antisocial behaviour.
  • Increased levels of crime.
  • Increased pressure in local service.

What are the benefits of converting your property?

HMO ConversionOne of the benefits of renting your property as an HMO is the increased revenue you can get in comparison to a single-dwelling rental unit.

HMOs are becoming very popular with students and professionals that are commuting during the working week such as doctors. There are some distinct benefits for the tenants as well, as they don’t need to worry about the maintenance or upkeep of an entire property. Higher-end HMOs will use cleaners. So, professionals who use their rooms can leave for the weekend and walk back into a clean room on the following Monday.

For an HMO property, you will need a specific HMO Mortgage, you should speak to a qualified adviser for advice in the area.

Other benefits of HMOs are not being rental dependent on one tenant and giving the landlord extra peace of mind.

One example would be a four-bedroom house that could get a rental income of £1400 per calendar month. Renting each room at £110 per week, you will receive a return of over £1700 per month.

Other advantages include only needing to renovate one room when a tenant decides they no longer want to rent. Single-dwelling properties have the expense of needing to redecorate the entire property. There are also several sites online that will assist in helping you in finding new occupants. Websites such as and Gumtree can prove to be very useful.

However, there are a few downsides to developing an HMO such as additional planning permission. Also, there are more regulations and insurance needed to get the licenses to rent an HMO legally.

How can you finance HMO conversion?

Before you start, it is worth checking how many HMOs are in your area as councils do restrict the amount. To find out more, you need to check your local area’s article 4 directive rules.

It’s harder to finance an HMO, so this is why lenders will look for experience, but this doesn’t need to be with HMOs. If you can show that you already have landlord experience with single lets or managing properties, also looking after tenants and dealing with voids this will go a long way to helping you finance the work. You cannot borrow as much on an HMO as you can on a single-let property. Also, prepare yourself to wait as HMOs take longer to get approved due to the extra paperwork and information required.

Lenders will check the value of the property against the prices of the area. So if there is a significant difference in your expected value, it may affect the ability to get lenders to approve the loan. It’s essential to get in touch with the broker as soon as possible. Explain to the broker what you are looking to do so they can confirm they believe the property is suitable as an HMO.


We hope this has piqued your interest in finding out more about HMOs and you are now eager to get started. HMOs are a great way of maximising the return you receive from your property and also reducing your risk by diversifying your monthly revenue across multiple sources (tenants). However, HMOs do come with conditions, and you need to do your research before getting involved. Learn what regulations are in place for your area as these can differ from councils. Also, consult an expert in property conversions and finance regulations, so you are best informed. HMO conversions are an exciting venture. With the current house prices, they show an area that can only grow in the current economic climate.

We can help you to secure the right finance for your HMO property. Just complete our quick enquiry form here and we will contact you shortly.

DISCLAIMER: These articles are for information only and should not be construed as advice. You should always seek advice prior to taking any action.