Questions About Renting Spare Rooms and HMO Licensing for My Primary Residence in Milton Keynes

whitehobbit1

I'm unsure if this is the right place to post my questions, so please educate me if I should direct them elsewhere.

I own a 4-bedroom house in Milton Keynes, which is my primary residence. I work remotely from one of the bedrooms and bought a larger home in anticipation of starting a family. Currently, I have 3 spare bedrooms that I don't need until then.

I have a few questions regarding renting out the rooms:

1. Does it make financial sense to rent out my spare rooms?
2. Would I need an HMO licence if I rent out two of the rooms to lodgers (not tenants)?
3. Do I need an HMO licence if my third bedroom is occasionally used by visitors (e.g., family or friends) who stay under 90 days without paying rent?
4. Would I need an HMO licence if a lodger uses the third bedroom regularly but not as their main residence (e.g., every other week for extended periods beyond 90 days)?
5. Do I need an HMO licence if I occasionally rent the third bedroom to Airbnb guests for stays under 90 days?
6. If all three spare bedrooms are rented out to lodgers for more than 90 days, would I definitely need an HMO licence?

I've looked at the following references but find the legal language a bit ambiguous:

- Housing Act 2004
- Milton Keynes Council's HMO guidance
- Government guidance

For example, Milton Keynes Council mentions that an HMO must be "solely or mainly used to house tenants". Since this is my primary residence, I'm unsure if this would apply. Any clarification would be greatly appreciated!

FlorayG

Simple - no. It's never a HMO if the owner lives there and it is their primary residence; the other people are lodgers.
You can earn up to £7,500 without paying tax on Rent A Room, so it might not be worth renting out ALL the rooms as that will probably put you over that threshold
Also, I think life could be very awkward having three/four people in the house who are strangers to each other. In your circumstances I think I would convert one bedroom into a sitting room and advertise for a couple to lodge with exclusive use of the two rooms, thus being able to charge more as they have more exclusive use
EDIT: just looked this up out of curiosity and apparently it's a bit like planning permission - your local council can set their own rules, so THEY may consider you a HMO. So I would advise speaking to the MK council on their HMO ruling

Bookworm105

FlorayG said:

Simple - no. It's never a HMO if the owner lives there and it is their primary residence; the other people are lodgers.

that is totally incorrect
an HMO is defined in terms of the number of "households (ie family + non family members) living in it, not their occupation status as lodger/tenant. For example a house with a resident LL plus 3 separate lodgers is an HMO

FreeBear

FlorayG said:

Simple - no. It's never a HMO if the owner lives there and it is their primary residence; the other people are lodgers.
You can earn up to £7,500 without paying tax on Rent A Room, so it might not be worth renting out ALL the rooms as that will probably put you over that threshold
Also, I think life could be very awkward having three/four people in the house who are strangers to each other. In your circumstances I think I would convert one bedroom into a sitting room and advertise for a couple to lodge with exclusive use of the two rooms, thus being able to charge more as they have more exclusive use
EDIT: just looked this up out of curiosity and apparently it's a bit like planning permission - your local council can set their own rules, so THEY may consider you a HMO. So I would advise speaking to the MK council on their HMO ruling

One lodger (or a couple), not an HMO. Two unrelated lodgers, possibly an HMO. Three lodgers, most likely an HMO. Makes no difference if the landlord is in residence or not. Once you are in HMO territory, the rules become much more stringent - Stuff like fire doors, smoke alarms, etc....

One thing you do NOT want to do is grant exclusive use of any area - Doing so, in effect, grants a tenancy which then makes it difficult to evict a problem. Make sure something along the lines of "access required for cleaning and safety checks" is included in any contract. In addition, no locks on internal doors that the lodgers have access to (thumb locks are OK).

Ratkin007

If you have 2 lodgers, then yes it is an HMO but it is not required to be licensed. If you have 3 lodgers then it is an HMO that may or may not be required to be licensed that is dependent on whether there is a Selective or Additional licensing scheme in place.  I've looked on Milton Keynes website and it looks like they only do Mandatory Licensing but I could be wrong.  As you can see by the differing responses provided here you are best placed to contact the local authority for answers to your questions and whether they have an additional or selective scheme or have any intentions of introducing such schemes.  Also to add, each local authority can apply their own rules on how they run their selective or additional schemes so what happens in one authority may be different to what happens in yours.  

If you are in Milton Keynes there is also the Article 4 to consider as you may be breaching planning.  What you are proposing is not clear cut, so again you are probably better off making contact with the relevant Local Authority to see if they can provide answers.  To me, it is not quite clear what your situation is. You say you have a 4 bed house with 3 spare rooms that is your primary residence and you work from 1 of the bedrooms.  Are you saying that you work from the bedroom in which you sleep? Also to add, if your house is 2 storeys, it is possible you would not require fire doors to bedrooms providing they are solid and well fitting, however you would require fire detection in the living room, kitchen, hallway and each landing. 

Bookworm105

whitehobbit1

For example, Milton Keynes Council mentions that an HMO must be "solely or mainly used to house tenants". Since this is my primary residence, I'm unsure if this would apply. Any clarification would be greatly appreciated!

MK's "guidance" is rather misleading. No where in legislation does it define an HMO by reference to the occupation status of the households living in the property
https://www.legislation.gov.uk/ukpga/2004/34/section/254 - definition of the building
https://www.legislation.gov.uk/ukpga/2004/34/section/258 - definition of "household"

There are 3 separtate questions you need to answer based on 3 bits of legislation:
1. will you need planning permission if you start housing multiple households (Use Class C4 - HMO) ?
2. will you need an HMO licence for the property?
3. who is liable for the council tax?

answers
1. You need to check with the council but on face value it looks like you may need PP.
For MK planning permission is required for converting a dwelling house into an HMO EXCEPT where the property will comprise no more than 3 total households ie:  landlord and 2 others 
Adopted Houses in Multiple Occupation SPD
"planning permission will be required when converting a dwelling house (C3) or non residential property to a Use Class (C4) HiMO anywhere in the borough. Exceptions 3.3 There are some exceptions where planning permission is not required, for example, where an owner of a property is living with no more than two lodgers...      
It is strongly advised that you contact the Planning Department for confirmation as to whether or not permission is required."

2. No, you will not need a licence
MK requires a licence for a property occupied by five or more people who are not all related, and where there is some sharing of facilities.
Houses in Multiple Occupation (HMO) | Milton Keynes City Council
That is a slight blurring of the law as "not related" would include an unmarried couple, but the legislation does actually class an unmarried couple who live together as a single household. In essence MK's licence applies to what the legislation refers to as a "compulsory" HMO, ie one where licence is an absolute requirement.

The principle underpinning it may be expressed as the fire test: who would rescue someone from a fire? A husband/boyfriend will always check if their wife/girlfriend got out (ie they are a one "family" household) but a single person would not necessarily check if another single person got out (2 households). Hence where there are more households there is more need for rules to drive what people have to do.

3. You alone will be liable for the whole council tax
Council Tax (Liability for Owners) Regulations 1992 define an HMO for council tax purposes as a dwelling inhabited by persons who do not constitute a single household.
The Council Tax (Liability for Owners) Regulations 1992
In reality what that means is the only person legally liable for paying council tax is the landlord - the LL can of course include CT within their rent charge, but only the LL can be taken to court for non payment of all or some of the total for the building.

theartfullodger

Primary residence is what reality says, not what someone claims it is. .(Obviously, easy way for landlords claiming to have lodgers when they were actually AST tenants )

Best regards to all