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Commercial Finance Network – Funding Made Simple
November 5, 2026

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FSE Manchester: Experts see HMOs as growth area for buy-to-let

Buy-to-let experts at the buy-to-let panel at FSE Manchester recommended intermediaries to do more HMO deals.

Adrian Moloney, sales director at OneSavings Bank, said “We’re seeing more commercial properties because it’s outside of the tax rules and landlords look at more HMO student accommodations because of greater returns.”

He added that with new rules coming into force in October that’ll potentially create 170,000 HMOs in the country, it’s an area advisers need to engage with.

He said: “Are you engaging with your landlords? Do you know it’s coming? Part of the journey the PRA has to do is assess this.”

Moloney warned though that if a landlord develops and lets out a HMO, they are limited because a family probably wouldn’t move into it.

He added: “I think it’s an ongoing discussion that will go on the next few months.”

David Whittaker, managing director at Mortgages For Business and Keystone Buy to Let Mortgages, said that if the new rules say a property with seven rooms has six due to how the new measurements work, he will have to follow that and underwrite for six rooms.

That’s not the only new rules since from April landlords can only let out properties with an energy rating of E or above.

Whittaker found in the county of Lincolnshire 26.4% of properties in 2014 that were rented out to landlords lacked basic EPC requirements.

He added: “So anyone that sends me a portfolio for Lincolnshire, I’ll look at each property more closely and I think every lender will too.”

With many rule changes such as these and mortgage tax relief reductions, Whittaker argued that brokers should be paid more in proc fees.

He said: “They will stay up. From 1 September we did it with Keystone because we recognise the world has become more complicated.

“I welcome everything that puts something back on our side of the table for all the extra work you have to do before you even decide which lender to use.”

Source: Mortgage Introducer

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New guidance to limit ‘over concentration’ and number of HMOs in Wrexham

New planning guidance that could help limit the ‘over concentration’ of HMOs in any one area have been backed by councillors.

Over recent years Houses in Multiple Occupation (HMO) have become a hugely contentious issue – with an increase in the number of application submitted to Wrexham Council proposing residential and former office / retail space are converted into HMOs.

The issue has been particularly prominent in the six town centre wards – Brynyffynnon, Erddig, Grosvenor, Maesydre, Offa and Smithfield. This has prompted the six town centre councillors to come together with the aim of strengthening planning guidance.

Current ‘Local Planning Guidance Note’ for dealing with HMOs was adopted in February 1993 and revised in June 2004.

However a report presented to Executive Board members last Tuesday, notes that the guidance “currently lacks specific criteria for determining whether there is an over concentration of HMOs in a given area and for the provision of outdoor amenity space”.

In a bid to resolve issues with clusters and over concentration of HMOs, Executive Board members last week unanimously backed plans to adopt new planning guidance.

The new guidance will limit HMOs to 10% within a 50 metre radius of the boundaries of the application site. Where concentration is more than 10%, “planning permission will not normally be granted unless there are relevant material planning considerations to justify doing so”.

It also provides criteria that will be used to discourage the development of clusters of HMOs within individual streets. This would be achieved by “a gap of at least two dwellings or other buildings not in use as a HMO between a proposed HMO and any existing HMO”.

This will enable the planning committee to consider community needs in assessing planning permissions.

At last week’s meeting Lead Member for Planning and Corporate Services, Cllr David Kelly, acknowledged that the previous plan is considered “no longer fit for purpose” due to lack of specific criteria on over concentration of HMOs and provision of outdoor space.

He added: “I know certain members have had longstanding issues with HMOs and the concentration.

“I believe the work done in consultation with town centre members goes a long way to address a lot of the issues.”

The planning guidance relates to applications across the county borough, however it is noted in last week’s meeting report that a series of meetings had been held with town centre councillors as they represent the areas where the “vast majority of existing HMOs are situated and where there is greatest demand for new HMOs”.

Councillor Marc Jones, who represents the Grosvenor ward, has previously described the situation with HMOs as “frustrating” and a “catch 22”.

Speaking after the meeting, Cllr Jones said: “We want to ensure a mix of housing – owner occupier, private rented, council housing and HMOs.

“The situation in some neighbourhoods and streets is that HMOs are dominating and that can cause problems in terms of transient populations, overcrowding, parking issues, poor amenity space and, in a minority of situations, anti-social behaviour.

“As councillors representing those areas most affected by HMOs, we have pushed officers to strengthen guidelines. We haven’t achieved what we hoped for with this guidance but it is a step in the right direction. We will review and monitor the effectiveness of the new guidance to see whether it does have the intended effect.”

During last week’s meeting Cllr Jones also spoke on behalf of a cross-party support group of the six town centre councillors, who recently met Wrexham AM Lesley Griffiths to stress the importance of Welsh Government support for new guidance.

They also highlighted the need for the Planning Inspectorate, nominally under Welsh Government control, to allow local councils to make decisions affecting local communities.

Cllr Jones added: “What we’ve seen in too many cases is that the local planning committee makes a decision, the landlord appeals to the Planning Inspectorate appeals and that is upheld. That’s not local democracy at work and it undermines the whole point of having a planning committee.

“We need to make sure the message will get through to Cardiff that our communities are a very fragile balance and the wrong decisions can have a huge impact on streets and neighbourhoods.

“HMOs have increased because many people don’t have any other option and that’s an indictment of how affordable homes aren’t being built.

“Councils such as Wrexham haven’t built a home for rent for a generation, although that will change later this year as the council starts to build again.

“These will start to replace the 10,000 council houses sold off since 1980 in Wrexham alone.”

Source: Wrexham

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Legislation change could catch out HMO landlords

New government rules mean thousands of buy-to-let investors will be forced to become licensed HMO landlords from 1 October.

The Residential Landlords Association claims that this will result in a further 177,000 landlords being subject to mandatory licensing. It will also affect all existing HMO landlords, who will have to ensure their properties meet new minimum standards.

Brokers are being urged to familiarise themselves with the new requirements, and contact clients who could be affected. Those that do not apply for the appropriate paperwork from their local council could be subject to unlimited fines and other legal action.

Many may also have to pay for property renovations to qualify for the licence.

Currently, a licence is only required for properties with three or more storeys that are occupied by five (or more) people from at least two households. From 1 October this will be extended to all properties that are occupied by five or more people from two or more households – regardless of the size of the property.

Licences are issued by the local council and are valid for five years. Landlords will have to demonstrate they are ‘fit and proper’, and that the property meets all relevant safety standards. Evidence of certain safety certificates will have to be updated on an annual basis.

At the same time, the government will introduce new minimum room sizes for licensed HMOs. At the moment some local authorities prescribe minimum room sizes, while others set out advisory standards.

Mortgages for Business chief executive David Whittaker says: “Many landlords will be unaware of these changes. They have been hit with a triple whammy of changes in recent years, so it is up to brokers to help explain how this latest regulatory change will affect them.”

He also pointed out that these minimum room standards may cause some problems for existing HMO landlords.

Mortgage Advice Bureau head of lending Brian Murphy says: “As an industry it is important that we have the right resources in place, with advisers equipped with the knowledge and experience necessary to help their customers.”

Coreco director Andrew Montlake says: “Whilst many of us understand why these changes have been instigated the quick timing between them means that landlords have had no respite in which to fully deal with them. We now need a period of calm to let this all bed in.”

Source: Mortgage Strategy

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Planning application for student flats at former Debenhams building withdrawn

A planning application to build student flats at the Castle Hill Arcade in Bangor (the former Debenhams building) has been withdrawn by developers.

Bangor City Council had objected to the development on the grounds that it would be an over-development and that additional student accommodation in the area is unnecessary.

Previous plans to build 65 student flats at the site were rejected by Gwynedd Council after concerns about the amount of student housing in Bangor.

The new plans would have retained the ground floor of the building as retail units with the 49-bed student accommodation to the upper floors and an extension at the rear of the building.

The developer, John Sutton from Manchester, had said the project would help free up housing for local families and boost the city centre economy.

The planning statement said: “It is considered that by providing purpose built student accommodation, the housing stock which has been converted into Houses of Multiple Occupation (HMO) and occupied by students can be returned back to their original purpose and be utilised as singular residential dwellings on the open market.

“This will contribute towards meeting the overall general housing need in Bangor, upgrade the quality of accommodation for students and agglomerate student accommodation reducing the sporadic pattern of units which occurs at present. This can ensure that the facilities students require can be provided in close proximity to their living quarters as they rarely rely on the private car.”

EXISTING STUDENT ACCOMMODATION

The planning statement also assessed the amount of existing student accommodation in Bangor, estimating that Bangor University has approximately 3,650 bed spaces available in Bangor at the official halls situated at Ffriddoedd Village, St Mary’s Village and Neuadd Garth.

The private sector currently supplies approximately 800 student bed spaces at site like Ty Glyn, the former British Hotel and former Plaza Cinema.

656 houses in Bangor (9.9% of housing stock) are registered with the Housing Department as HMO (housing definition).

809 houses in Bangor (12.3% of housing stock) do not pay Council Tax (not all can be confirmed as students – but students are exempt from Council Tax).

453 houses in Bangor (6.8% of housing stock) are both in multiple occupation and do not pay Council Tax.

The total housing stock of Bangor is 6,597. Therefore a high percentage of the housing stock is taken up by HMO/housing not paying Council Tax.

Source: The Bangor Aye

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Government urged to hold parliamentary debate on minimum room sizes

Letting agent groups are warning that the private rental sector is set to lose vital stock as the Government presses ahead with plans for minimum room sizes for Houses in Multiple Occupation.

The National Approved Lettings Scheme (NALS) and ARLA Propertymark have both said they understand the changes but have questioned whether they should go ahead.

HMO landlord Dhugal Clark has launched a petition calling for a parliamentary debate on minimum bedroom sizes that are set to be introduced in October through the the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018.

He warns that the changes – which sets a minimum bedroom size requirement at 6.51 square metres for a person aged ten years or over –  will reduce the number of rooms available for tenants and mean those living in bigger properties will end up paying more council tax as well as higher rents.

David Cox, chief executive of ARLA Propertymark, said the proposals had been consulted on since 2016 and warned it was too late for a parliamentary debate but said the trade body has written to the previous housing ministers to question these changes.

He told EYE: “We have made verbal and written representations with the Government.

“We understand where the Government is coming from. They want everybody to live in good quality accommodation but a lot of older properties have boxrooms.

“There are always people willing to have a smaller room to save money on rent, this is going to take away those rooms and means the costs are shared by fewer people.

“People happy to live in a box room have to pay increased rent to live in a bigger room.

“Why does the Government feel it knows better than an individual making an informed decision based on the size of a room?”

Isobel Thomson, chief executive of NALS, added: “NALS would like to see more parliamentary debate over minimum room sizes in HMOs.

“While we understand Government’s aim is to improve some specific types of HMO accommodation in the sector, it’s important that common sense prevails. As it stands, the proposed changes will remove councils’ discretion to assess a property on its own merits, as they can now.

“This means we’ll lose much-needed accommodation from the PRS in what are otherwise decent and safe properties.”

Source: Property Industry Eye

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Plans to restrict HMOs in St Andrews to be debated

New restrictions on houses in multiple occupation (HMOs) in St Andrews have been proposed to control the number of student lets in the town centre.

If approved, thresholds would be set and no new licences issued where the number of HMOs has reached its limit.

Townspeople and councillors have called for years for a new policy to deal with applications for new HMOs in the university town.

A proliferation of HMOs, which are typically let to students, has been blamed for creating areas with few permanent residents and problems with rubbish, neglect and antisocial behaviour.

Following an independent probe by North Star Consulting and Review, Fife Council’s housing service has advised that the threshold policy be adopted and will ask the north east Fife area committee on Wednesday to recommend it to the housing services committee.

A report by housing manager Vania Kennedy states: “The demand for HMO accommodation is particularly high in St Andrews from students, young professionals and people working away from home.

“A moratorium was introduced under planning policy to achieve a balance between the competing demands for accommodation and the need for a balanced community.

“Research suggests that the recent increase in the number of HMOs in St Andrews indicates it is not having the desired impact and an unintended consequence has been to push the provision of HMOs for students out from the centre to surrounding areas.”

Since the moratorium was introduced in 2011 the number of HMOs has increased by more than 11%.

The housing service rejected thresholds proposed by North Star, which it said had drawbacks, and came up with its own, dividing the town into three zones.

The policy would permit 18% to 22% of properties in the town centre to be HMOs, 6% to 10% in the east and 4% to 7% in the west.

The report said: “The aim is to protect traditional residential areas which are most favoured by the family market and permanent residents, and allow a certain level of HMOs in each part of the town.

“In practice, where the existing provision at the time of determining a proposal exceeds the threshold limit set, current licence holders would still be able to renew their licence and exemptions would also apply to the policy.

“However, there would be a general presumption that no new applications would be granted a HMO licence on grounds of overprovision where the thresholds have been exceeded.”

Consultation would be required before the new policy was adopted, and the current town centre moratorium would remain in place until then.

Source: The Courier

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HMO and multi-unit landlords have highest rental yields

Landlords with houses in multiple occupation (HMO) and multi-unit freehold blocks (MUFB) in their portfolio are reaping the highest rental yields, according to research by Precise Mortgages.

Yields on houses in multiple occupation were typically 7.1% in the first three months of 2018, 1.3% higher than the market average, the study carried out by BDRC Continental showed.

Multi-unit blocks were found to yield 6%, compared to 5.8% across all property types, over the same time period.

However, average yields dipped slightly in Q1 2018 to 5.8% from 5.9% in the last quarter of 2017 and are now at the same level as Q1 2017.

Smallest landlord portfolios have lowest yield

The highest average yields of 6.7% were achieved on portfolios of between 11 and 19 properties, underlining the continued rise of the professional landlord.

By contrast those with just one property achieved yields of 4.8%.

On a regional basis, landlords with portfolios in the North West reported the highest rental yields at 6.7% while central London portfolios produced the lowest average yields at 4.8%.

Precise Mortgages managing director Alan Cleary noted that experienced landlords were looking to rebalance their portfolios given changes in the market.

“As HMOs attract multiple tenancies, gross rental income tends to outstrip single lets and rental income is more secure even if one tenant leaves a void,” he said.

Source: Mortgage Solutions UK

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Estate Agency And Landlord Both Fined For Licensing Breaches

A landlord has been ordered to pay more than £10,000 for licensing breaches relating to a property that has also seen an estate agency fined.

Willesden Magistrate Court fined Easy Let agency £20,299 in February for failing to licence a three-storey, semi-detached house that was found to be worryingly overcrowded. Following this, property owner Mohammed Mehdi Ali has also been fined £10,000 due to his failure to licence the property, which had been split into flats. This sum is on top of court costs totalling £3,300.

London’s Brent Council found that Easy Let and Ali were in breach of HMO laws. They had crammed more than 10 people into the ground and first floor rooms. Three children were also living in the property.

Willesden Magistrates Court also heard a second case, involving landlord Stephen Citron, who was ordered to pay £17,273 in fines and court costs. This was due to his failure to comply with licensing regulations.

Brent Council had found Citron renting out undersized bedrooms to tenants. He was letting a two-storey property with five standard size bedrooms and two undersized rooms which prohibited for use under the licence conditions.

The rooms measured 5.1 sqm and 4.8 sqm respectively. The legal requirement minimum requirement for a single room is 6.5 sqm, rendering the rooms clearly undersized and unfit for human habitation.

It was said that Citron ignored repeated warnings to make adjustments to his property in order to comply with legal requirements.

Brent Council’s head of private housing services, Spencer Randolph, said Ali and Citron were given ‘every opportunity’ to comply with regulations.

He stated: ‘Instead they held the council in contempt and ended up in court. If they had cooperated with us, they would have been spared the hefty financial blows and criminal records they were dealt in court.’

Source: Residential Landlord

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Make the most of HMO regulation changes

Regulatory changes have been a consistent characteristic of the buy-to-let market in recent years and 2018 is proving to be no different.

At the beginning of April, new minimum energy efficiency standards were introduced for privately rented property and the government is extending the scope of licensing for HMOs this October.

At present, a mandatory licence is required for properties with three or more storeys that are occupied by five or more people from two or more households. From 1st October, a licence will be needed for HMOs occupied by five or more people from two or more households, regardless of the number of storeys. The Residential Landlords Association claims this change means that an additional 177,000 HMOs will become subject to mandatory licencing, and there is no limit to the potential fine for renting out a qualifying HMO without a licence.

Licences are issued by the local council and valid for a maximum of five years. Landlords of licensed HMOs must make sure the house is suitable for the number of occupants and that the manager of the property – which could be the owner or an agent – is considered to be ‘fit and proper’. This excludes people with a criminal record or a previous breach of landlord laws or code of practice.

Owners must also send the council an updated gas safety certificate every year, install and maintain smoke alarms and provide safety certificates for all electrical appliances when requested, as well as any other conditions imposed by the local council.

In addition to these requirements, the government has also proposed a minimum room size for bedrooms in licensed HMOs. At the moment, some local authorities prescribe minimum room sizes, while others set out advisory standards, and this new approach will dispel confusion with a standard approach to all licensed HMOs.

Landlords must ensure the following:

• single bedroom to be used by one person over 10 years should not be less than 6.51m2
• double bedroom to be used by two people over 10 years should not be less than 10.22m2
• single bedroom to be used by one person under 10 years should not be less than 4.64m2.

Where there is a breach to these minimum bedroom sizes, local authorities may grant a period to rectify the situation, although this will not exceed 18 months.

So, there is plenty to think about for owners of HMOs in the coming months, and this provides you with a great opportunity to revisit your database of HMO clients to make them aware of the upcoming changes and their responsibilities.

Some may need to fund renovations to ensure they meet minimum standards and room dimensions and, even if no renovations are needed, this change in regulation provides you with a chance to make contact and discuss their other funding requirements.

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Massive extension to HMO licensing comes into force

CHANGES to Government rules mean a huge expansion in the number of HMOs requiring licences. Until this month an HMO (house in multiple occupation) only required a licence if it had three storeys and was occupied by five or more people, in two or more separate households while sharing kitchens/bathrooms.

The new regulations remove the three storey requirement, and Bournemouth council estimates it will have to license an additional 2,500 properties out of an estimated 3,000 previously unlicensable properties across the borough.

A report from the council’s private sector housing team to the communities scrutiny committee states that “2018/19 promises to be another exceptionally busy year”.

“The following key projects and service developments will be delivered,” the report says.

“The Extension to Mandatory HMO Licensing which could mean that the number of licensed HMOs will increase to approximately 2,500.

“The Housing and Planning Act has come into force which will bring further significant changes to our enforcement powers with Banning Orders for rogue landlords.”

Until April, council figures show there were 601 licensable HMOs across Bournemouth and Poole, of which 529 were in Bournemouth.

Bournemouth estimated there were 3,000 non-licensable HMOs in the borough, however in the past officers have often stated that it can be difficult to keep track of unlicensed properties.

Of these, 1,800 were believed to house students.

The new regulations bring in mandatory conditions relating to minimum sleeping room sizes, maximum number of occupants and provision of refuse facilities.

Licenses last for five years.

The private sector housing team, which among its duties is charged with ensuring landlords maintain their properties in good condition, dealt with some 2,600 service requests over the past financial year, according to its annual report.

There were 786 complaints relating to such issues as damp, lack of heating, lack of fire safety and overcrowding.

The team also lodged 11 prosecutions, and by the end of the year had three successes, through which some £2,300 was collected in fines and costs.

Also, the borough’s team has carried out an inspection of the nine mobile home parks in the area to ensure compliance with licence conditions. Together these parks house some 500 mostly elderly people.

One site, which is not identified, was prosecuted for non-compliance and the council collected £850 in fines and costs.

Source: Bournemouth Echo

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