HMO Feasibility Checklist

HMO Feasibility Checklist

Converting a property to an HMO can significantly increase rental yield, but the regulatory and compliance requirements are substantially higher than for a standard let. Assess feasibility carefully before committing.

Definition and Licensing Thresholds:

• HMO: 3 or more tenants from 2 or more households sharing facilities
• Mandatory HMO licence: 5 or more tenants from 2 or more households (England)
• Additional licensing: check whether your local authority has introduced additional licensing for smaller HMOs
• Selective licensing: check whether the area is subject to selective licensing

Planning Requirements:

• Change of use from C3 (dwelling house) to C4 (small HMO, 3–6 occupants) may require planning permission — check with the local planning authority
• Sui generis use (7+ occupants) always requires planning permission
• Some local authorities have Article 4 Directions removing permitted development rights for C3 to C4 conversion — check before proceeding

Room Size Standards:

• Single occupancy bedroom: minimum 6.51 m²
• Double occupancy bedroom: minimum 10.22 m²
• Room used by a child under 10: minimum 4.64 m²
• Rooms below minimum size must not be used as sleeping accommodation

Fire Safety:

• Interlinked mains-wired smoke alarms on every floor
• Heat detector in kitchen
• Fire doors to all habitable rooms and kitchen (FD30 minimum)
• Emergency lighting in communal areas (for larger HMOs)
• Fire risk assessment required

Amenity Ratios:

• 1 bathroom/shower room per 4–5 occupants (check local authority standards)
• 1 WC per 4–5 occupants
• Kitchen facilities adequate for the number of occupants

Financial Viability:

• Estimate conversion costs: fire doors, alarms, room works, kitchen/bathroom upgrades
• Estimate licensing fee (typically £500–£1,500 per property)
• Model gross and net yield at target occupancy
• Compare with single-let yield on the same property
• Factor in higher management costs and void risk per room