Renting out rooms

bathwiggle

Please be nice, i'm new here, although reading mse got me through a very stressful time buying my house.

I've recently completed on a 3 floor, 4 bedroom house, and i'd like to be able to rent out one or two of the rooms to get a bit of money in.

I understand under the rent-a-room scheme i can earn £4250 ish tax free, but i was wondering if i rent out two rooms, with them sharing the bathroom, kitchen and dining room, and me keeping the living room and my bedroom as mine, would it become a HMO?

I wouldn't want to rent out the 3rd spare room as that way i'll always have a spare room.

I've read several things and managed to confuse myself, so if someone could un-confuse me i'd really appreciate it.

Thank you

gazter

I think, if you have three floors your local authority might automatically classify it as a HMO if you rent even one room out.

BitterAndTwisted

If the owner is resident it cannot be an HMO, and the occupants of the rented rooms will be lodgers. Doesn't matter how many bedrooms there are nor how many storeys the property has.

Guest101

I would think they would be lodgers, but gazter's reply makes me doubt this.

Why would having 3 floors change this. There's lots of victorian houses in my area, terraced and 3 floors and i've not seen them as HMO - nevermind Bitterandtwisted confirmed what i thought

red40

If you only take two 'lodgers' it falls outside the HMO definition subject to the Housing Act 2004, so you would be fine. Just make sure your lender allows this type of arrangement.

Take in a third lodger and you would bring the property into the HMO definition.

HTH

00ec25

welcome to a nice simple topic . There are 2 definitions of HMO

HMO for Council tax
You have created an HMO for council tax purposes since there is more than one household present and you remain resident, therefore you , and only you, are liable for the council tax
http://www.legislation.gov.uk/uksi/1993/151/regulation/2/made

HMO for licensing
As you may know the point of an HMO is that it may require the LL to meet additional standards of fixtures and fittings that would not be required in a simple let to a single household

as a resident LL with 2 or more lodgers then you are indeed an HMO since there are 2 or more households present (legal definition)

but the key thing for you is does your council have selective licensing in operation in your area since you are not a mandatory HMO as despite being 3 storeys you do not have 5 households in residence.

If they do selective licencings then you will need to meet their criteria, whatever they are. Some councils may go as low as 2 household HMO but that would be really tough. Even 3 households is rare but the fact remains yours is a 3 storey property and so, even though you may not be using the attic room, there are all sorts of H&S risks which you should address as a responsible LL irrespective of whether you are made to take a licence anyway

you should talk to your council and ask then what their rules are. It would seem from your post that your intention is to be legitimate and not to hide below the radar so go talk to them, mine were very good about it and their advice was useful in deciding what I should install and what was a luxury

BTW - rent a room is exactly £4,250 pa total, not per person and certainly not excluding bills (eg share of council tax and/or "contribution" to running costs)

00ec25

BitterAndTwisted wrote: »

If the owner is resident it cannot be an HMO, and the occupants of the rented rooms will be lodgers. Doesn't matter how many bedrooms there are nor how many storeys the property has.

fundamentally wrong

BitterAndTwisted

How can an owner/resident landlord and two lodgers be three separate households? They are not a multiple but solely one.

bathwiggle

00ec25 wrote: »

welcome to a nice simple topic . There are 2 definitions of HMO
BTW - rent a room is exactly £4,250 pa total, not per person and certainly not excluding bills (eg share of council tax and/or "contribution" to running costs)

Thank you. I know the allowance is total, and i pay tax after that, and i'm responsible for all bills.

This has come about as one friends been made homeless and needs somewhere to live and although the house isn't decorated completely, i wanted to check what i had to do before i started saying yes.

I was hoping i could get away with not ringing the council, but guess i'm going to have to.

bathwiggle

BitterAndTwisted wrote: »

How can an owner/resident landlord and two lodgers be three separate households? They are not a multiple but solely one.

Is it not because i don't have access to their rooms, although i'll have a key to them, it's their own private space.

red40

00ec25 wrote: »

as a resident LL with 2 or more lodgers then you are indeed an HMO since there are 2 or more households present (legal definition)

I usually agree with 00ec25, but today I am not

A resident landlord is permitted to have 2 lodgers in occupation without it being a HMO. Schedule 14 states:-

6 - Buildings occupied by owners
Any building which is occupied only by persons within the following paragraphs
(a)one or more persons who have, whether in the whole or any part of it, either the freehold estate or a leasehold interest granted for a term of more than 21 years;
(b)any member of the household of such a person or persons;
(c)no more than such number of other persons as is specified for the purposes of this paragraph in regulations made by the appropriate national authority.

The appropriate national authority (Central Government) made the necessary regulations, these being this Statutory Instrument http://www.legislation.gov.uk/uksi/2006/373/contents/made and the relevant regulation 6(2) which refers to the above schedule 14 - 6 (1) (c) of the Housing Act 2004.

HTH