Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Jade2017
    • By Jade2017 18th May 17, 8:20 PM
    • 1Posts
    • 0Thanks
    Jade2017
    Renting out our house with annex
    • #1
    • 18th May 17, 8:20 PM
    Renting out our house with annex 18th May 17 at 8:20 PM
    Hello,

    I was hoping someone might be able to offer some advice regarding renting out our property.


    We have a 4 bedroom house which is 3 storeys high with an attached 2 bedroom annex. My boyfriend and I would like to rent out 4 bedrooms in the house to 4 tenants and we would live separately in the annex. Although the annex is attached to the house and there is a door between the properties, they have separate entrances and we pay separate council tax. The tenants would share the communal areas in the main house (bathrooms, kitchen etc) but the door between the properties will be locked and the tenants will not be allowed to enter the annex.


    I believe our house would be considered a House in Multiple Occupancy (HMO), however would it be considered a large HMO due to the fact that there are 4 tenants altogether as well as myself and my boyfriend who are living in the annex? If we are a large HMO I believe that we need to inform the council.


    Would we need a separate TV licence for the house and for the annex?


    What is the situation with tax? Do we just complete a self-assessment tax form at the end of the year or is there something else we should be aware of?


    We will ensure that we would have the right electric and gas certificates for renting and we would use the government deposit scheme. Is there anything else that we need to consider? Do we need to fit fire doors etc?


    This is our first time as landlords so any advice would be greatly appreciated!
Page 1
    • G_M
    • By G_M 18th May 17, 9:00 PM
    • 41,916 Posts
    • 48,506 Thanks
    G_M
    • #2
    • 18th May 17, 9:00 PM
    • #2
    • 18th May 17, 9:00 PM


    We have a 4 bedroom house which is 3 storeys high with an attached 2 bedroom annex. My boyfriend and I would like to rent out 4 bedrooms in the house to 4 tenants and we would live separately in the annex. Although the annex is attached to the house and there is a door between the properties, they have separate entrances and we pay separate council tax. The tenants would share the communal areas in the main house (bathrooms, kitchen etc) but the door between the properties will be locked and the tenants will not be allowed to enter the annex.
    OK

    I believe our house would be considered a House in Multiple Occupancy (HMO),
    Yes
    however would it be considered a large HMO due to the fact that there are 4 tenants altogether as well as myself and my boyfriend who are living in the annex? If we are a large HMO I believe that we need to inform the council.
    There are effectively 2 separate properties. The (rented) house would be an HMO - check your local council for the precise HMO rules.

    Would we need a separate TV licence for the house and for the annex?
    Yes.
    And probably each tenant would need their own as it's an HMO

    What is the situation with tax? Do we just complete a self-assessment tax form at the end of the year or is there something else we should be aware of?
    Self-assessment.
    But you need to read up on the tax rules to see what is an allowable expence etc


    We will ensure that we would have the right electric and gas certificates for renting and we would use the government deposit scheme. Is there anything else that we need to consider? Do we need to fit fire doors etc?
    You'll need to comply with the relevant HMO rules - see your council website


    Originally posted by Jade2017
    Read:

    * New landlords: advice, information & links

    * Letting agents: how should a landlord select or sack?and all the links within those posts.
    • theartfullodger
    • By theartfullodger 18th May 17, 9:03 PM
    • 9,045 Posts
    • 11,965 Thanks
    theartfullodger
    • #3
    • 18th May 17, 9:03 PM
    • #3
    • 18th May 17, 9:03 PM
    It will almost certainly be a HMO: Speak with council HMO dept. Fire doors, smoke alarms, inspections etc etc etc..

    This is worth a read

    http://forums.moneysavingexpert.com/showthread.php?t=5180214

    As you will be in the annex they will have a tenancy (they ain't lodgers...) but it can't be (may not be, legally impossible to be) an AST: They will have Common law tenancies. It is likely tenants, most agents, councils won't understand.

    You need to declare ALL rent income to HMRC, with allowable deductions/expenses.

    Speak with any mortgage company - might be an issue. Also insurers.

    It's a minefield...
    • Cakeguts
    • By Cakeguts 18th May 17, 9:10 PM
    • 3,058 Posts
    • 4,238 Thanks
    Cakeguts
    • #4
    • 18th May 17, 9:10 PM
    • #4
    • 18th May 17, 9:10 PM
    You may need to apply for planning permission from your local council for a change of use to an HMO.
    • JuzaMum
    • By JuzaMum 18th May 17, 9:34 PM
    • 224 Posts
    • 197 Thanks
    JuzaMum
    • #5
    • 18th May 17, 9:34 PM
    • #5
    • 18th May 17, 9:34 PM
    It's a LARGE HMO because it has three floors.
    • CIS
    • By CIS 18th May 17, 9:59 PM
    • 10,067 Posts
    • 5,752 Thanks
    CIS
    • #6
    • 18th May 17, 9:59 PM
    • #6
    • 18th May 17, 9:59 PM
    For council tax purposes - will it be a joint tenancy or will it be individual tenancies for a room ?

    Craig
    I no longer work in Council Tax Recovery as I'm now a self employed Council Tax advisor and consultant with my own Council Tax consultancy business. My views are my own reading of the law and you should always check with the local authority in question.
    • 00ec25
    • By 00ec25 18th May 17, 11:37 PM
    • 5,350 Posts
    • 4,693 Thanks
    00ec25
    • #7
    • 18th May 17, 11:37 PM
    • #7
    • 18th May 17, 11:37 PM
    As you will be in the annex they will have a tenancy (they ain't lodgers...) but it can't be (may not be, legally impossible to be) an AST: They will have Common law tenancies.
    Originally posted by theartfullodger
    artfull, why not an AST?

    by the sounds of it the occupation will be of a self contained building which obviously has not been purpose built as self contained, but will be operated as such. Yes the LL is resident in the same building, but they are in a separate self contained part?
    • theartfullodger
    • By theartfullodger 19th May 17, 1:33 PM
    • 9,045 Posts
    • 11,965 Thanks
    theartfullodger
    • #8
    • 19th May 17, 1:33 PM
    • #8
    • 19th May 17, 1:33 PM
    artfull, why not an AST?

    by the sounds of it the occupation will be of a self contained building which obviously has not been purpose built as self contained, but will be operated as such. Yes the LL is resident in the same building, but they are in a separate self contained part?
    Originally posted by 00ec25
    See Housing Act 1988 Schedule 1(10)
    http://www.legislation.gov.uk/ukpga/1988/50/schedule/1/part/I/crossheading/resident-landlords
    - Schedule 1 lists those "Tenancies Which Cannot be Assured Tenancies" (may not be ATs, legally impossible to be ATs). An AST is but a special form of AT
    - clause 10 says "Resident landlords" can't have ATs (so can't have ASTs) and defines them as
    Resident landlords

    10 (1)A tenancy in respect of which the following conditions are fulfilled—
    (a) that the dwelling-house forms part only of a building and, except in a case where the dwelling-house also forms part of a flat, the building is not a purpose-built block of flats; and etc etc etc etc....
    As I said, It is likely tenants, most agents, councils won't understand. Or many landlords, solicitors etc etc etc
    • CIS
    • By CIS 19th May 17, 2:21 PM
    • 10,067 Posts
    • 5,752 Thanks
    CIS
    • #9
    • 19th May 17, 2:21 PM
    • #9
    • 19th May 17, 2:21 PM
    See Housing Act 1988 Schedule 1(10)
    http://www.legislation.gov.uk/ukpga/1988/50/schedule/1/part/I/crossheading/resident-landlords
    - Schedule 1 lists those "Tenancies Which Cannot be Assured Tenancies" (may not be ATs, legally impossible to be ATs). An AST is but a special form of AT
    - clause 10 says "Resident landlords" can't have ATs (so can't have ASTs) and defines them as
    As I said, It is likely tenants, most agents, councils won't understand. Or many landlords, solicitors etc etc etc
    Originally posted by theartfullodger
    It's an interesting issue - one which I've never thought of before as I've never needed to.

    There's a good write up on it here - http://www.letlink.co.uk/articles/119-articles/resident-landlord/461-resident-landlords-under-the-housing-act-1988 - where this sort of issue is considered. Lewis-Graham v Conacher would appear to be the most relevant of the listed cases and agrees that the dwellings would be considered to be in the same 'building' (assuming the case has been superseded)

    Craig
    I no longer work in Council Tax Recovery as I'm now a self employed Council Tax advisor and consultant with my own Council Tax consultancy business. My views are my own reading of the law and you should always check with the local authority in question.
    • 00ec25
    • By 00ec25 19th May 17, 6:55 PM
    • 5,350 Posts
    • 4,693 Thanks
    00ec25
    thanks

    an interesting contrast because I'm sure that for tax purposes they cannot claim to be resident LL, and so cannot use the rent a room scheme
    • CIS
    • By CIS 19th May 17, 7:24 PM
    • 10,067 Posts
    • 5,752 Thanks
    CIS
    thanks

    an interesting contrast because I'm sure that for tax purposes they cannot claim to be resident LL, and so cannot use the rent a room scheme
    Originally posted by 00ec25
    It's another good example of how legislation uses a term for one thing and then the same term with totally different meanings for something else.

    Craig
    I no longer work in Council Tax Recovery as I'm now a self employed Council Tax advisor and consultant with my own Council Tax consultancy business. My views are my own reading of the law and you should always check with the local authority in question.
    • theartfullodger
    • By theartfullodger 19th May 17, 7:52 PM
    • 9,045 Posts
    • 11,965 Thanks
    theartfullodger
    thanks

    an interesting contrast because I'm sure that for tax purposes they cannot claim to be resident LL, and so cannot use the rent a room scheme
    Originally posted by 00ec25
    They could, as long as total rent (before any allowable expenses) was less than £7,500 p.a. Ain't gonna happen in this case but might in a one-bed annex somewhere heavily downmarket....
    https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

    Expecting the UK taxation system (or benefits system or sovereign grant...) to be fair & reasonable is likely to lead to disappointment
    • parking_question_chap
    • By parking_question_chap 19th May 17, 8:05 PM
    • 1,408 Posts
    • 1,234 Thanks
    parking_question_chap
    Sounds like you may have a mixed use site if you move into the annex and turn the main dwelling into a HMO. Contact the planning department, as this almost certainly needs PP as you are turning the annex to a C3 residential dwelling.

    Edit, the mainhouse would be smallscale hmo if less than 7 unrelated people lived there, and would not usually need pp. However as you are in a wholly self contained annex this cannot be defined as part of the smallscale hmo use class.
    Last edited by parking_question_chap; 19-05-2017 at 8:14 PM. Reason: More detail
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

317Posts Today

2,656Users online

Martin's Twitter