August 7, 2019 No Comments

Advice for landlords and investors in Edinburgh HMO Property

Posted by Miles Leslie in Blog

Edinburgh HMO licensing guide

Many potential landlords thinking about investing in HMO property have been asking us about HMO (Houses in Multiple Occupancy) regulations and the licensing requirements in Edinburgh. Our letting agency is based in Bruntsfield, a predominantly student area of Edinburgh, so we manage a significant number of HMO properties and, on average, apply for a new HMO license every 1-2 months.

The most popular questions arising are: (How do I get HMO license for my flat? How much will it cost? What kind of rent should I expect?), we therefore decided to prepare a structured guide for landlords thinking about HMO properties in Edinburgh.

What are Houses in Multiple Occupancy?

HMOs, in short, are properties let to 3 or more unrelated individuals who share the bathroom or toilet and kitchen. More precisely, tenanted by more than 2 tenants that are not part of the same family or household. Let’s say we have a 2-bedroom flat with 2 flat sharers – the HMO license would be unnecessary.

Should one of the tenant’s partners move in with them, they would constitute a couple and as such would be considered a household – therefore no license required. Two brothers/sisters/cousins/stepbrothers and their friend would not need an HMO license either, but three student friends and flat sharers would.

Why invest in HMO properties?

Let’s use an example of a 3-bedroom tenement flat in Bruntsfield or Morningside, of average standard. If it is not an upmarket property, it would be difficult to let it consistently for more than £1200 pm without significant voids. Now assume the property gets an HMO license for 3 tenants – the same property rental valuation rises to around £1500 pm overnight. Even better – if all bedrooms are big enough (over 10 sq. m), then the living room can be turned into a bedroom, and the same flat, now with a license for 4 tenants, could bring in £2000 pm. In general terms, depending on the location in Edinburgh and the property standard, bedrooms are worth between 400 and 650 per month.

Now, a word of caution – we would advise to comply with all HMO regulations to the letter, as fines for renting out unlicensed HMO property reach £50 000.

Advice on typical HMO requirements in Edinburgh

Edinburgh Council requirements do change (certainly the interpretation of such requirements does), so please note that this post was published in August 2019. A few years ago, inspectors were not checking whether the minimum bedroom width was 2.25m – now they do. In general, the landlords considering investing in HMO license should take into account a few key issues:

  • Carpets – if you do have neighbour’s downstairs (i.e. your flat is not a ground floor/main door property), council’s building standards inspectors may insist on installation of quality carpets with good underlay and thick vinyl to dampen the noise. It may be a significant cost: recently we were quoted above £3000 to install carpets/vinyl flooring in a 3-bedroom property. There is an exemption, though – this expense can be avoided if the occupant or occupants of the flat below sign a letter confirming that the current ‘impact noise provisions’, or in plain language, the current flooring, is satisfactory.
  • Doors – another possible significant expense. All bedroom and living areas doors should be self-closing (from any position), fire resistant and fitted with intumescent smoke seals that expand in higher temperatures.
  • Fire alarms – kitchen needs a heat detector, every bedroom, hallway, living room, bigger cupboards and cupboards with the fuse board (RCD board) will need smoke detectors. All alarms must be hardwired with a battery backup and interlinked (we recommend Bluetooth linked detectors). Realistically, properties already let will need additional detectors in bedrooms and possibly in cupboards.
  • Room size – there are two types of HMO properties: with and without communal living area. If there is a communal living room (at least 11 sqm), the smallest bedroom should be at least 6.5 sq. m, with a width not less than 2.25 m. On the other hand, if after turning a living room into additional bedroom the property lacks a real communal living space (for example big dining room adjacent to the kitchen would still count as a communal living space), then the smallest bedroom will need to be over 10 sqm.
  • Fire risk assessment – one of the first steps for any landlord considering applying for an HMO license. It will be a ‘to do list’ before the initial HMO inspection. Fire risk assessment should be an ongoing process after the property is successfully let.
  • Emergency lighting – may be required if there is no borrowed light in hallway, towards the emergency exit.
  • Firefighting equipment – at least 1 fire extinguisher (attached to the wall in the hall) and a fire blanket (attached to the wall in the kitchen).
  • Locks – no mortice or regular Euro locks are allowed in shared properties. Yale or thumb turn locks are approved, so that any door could be easily opened from the inside in case of fire.
  • CO detectors – carbon monoxide alarms must be fixed by every gas appliance (hob, boiler, fireplace) or in equal distance between appliances. Alarms may be portable, with an enclosed non replaceable battery that lasts at least 7 years.
  • Safety and compliance certificates – all regular letting certificates will be required: landlord registration, Electrical Installation Condition Report, Portable Appliance Test, Gas Safety Certificate, Emergency Performance Certificate. On top of the usual letting compliance there are HMO related certificates necessary: Fire Fighting Equipment, Fire Detection Systems and Emergency Lighting tests need to be tested by a competent assessor at least once a year. Minor checks are necessary every week (fire or smoke alarms) or on a monthly basis (extinguishers, emergency lights).

Edinburgh HMO application, step by step guide

The whole process can be split into two parts. The first one consists of obtaining all necessary certificates and carrying out obvious remedials. It takes usually 1-2 months.
The latter part, the application itself, according to the Edinburgh Council average timescale takes 141 days. It consists of:

  • Filling in and submitting application, online or offline.
  • Paying a House in Multiple Occupancy license application fee, which depends on the number of occupants: 3 tenants £594, 4 tenants £792, 5 tenants £990, 6 tenants £1243.
  • Displaying a site HMO notice for 21 days.
  • The first joint inspection by building standards and fire safety inspectors.
  • Letter of outstanding works.
  • The second / follow up inspection, usually around a month after the initial HMO inspection.
  • Confirmation in writing of any minor works picked up during the follow up inspection.
  • License is granted!

HMO license application renewal fees

Please note that initially you will be granted a 1 year license. On renewal, you will be entitled to apply for a 3 year license at the same cost, ie 3 tenants £594, 4 tenants £792, 5 tenants £990, 6 tenants £1243.

If you need help with an HMO licence…

Edinburgh Letting Centre is a specialist HMO letting agency and we help our current and potential landlords with both investment, sourcing and legislation advice – we regularly submit applications for new and existing HMO licenses and know the Edinburgh Council requirements like the back of our hands.

If the housing legislation and regulations seem daunting or you are not sure whether you could deal with the co-ordination of several trades and safety certification, please check our Edinburgh HMO application service or contact us to discuss your next steps as a prospective HMO landlord.

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