HMO guaranteed rent is a lease on a whole house in multiple occupation, where a company pays you one fixed monthly rent and manages the individual rooms and sharers. In England, a house shared by five or more people forming more than one household needs a mandatory HMO licence from the council.
What counts as an HMO?
A house in multiple occupation is a property rented to at least three people who are not from one household and who share facilities such as a kitchen or bathroom. A large HMO, shared by five or more people from more than one household, needs a mandatory licence. Councils can also require licences for smaller HMOs through additional licensing, and for other rentals through selective licensing in set areas.
Who holds the licence on a guaranteed rent HMO?
Either the owner or the managing company can hold the licence, depending on the arrangement and what the council accepts. The licence holder must be a fit and proper person and is responsible for meeting the licence conditions. Agree who this will be before the lease is signed and write it into the agreement.
What safety rules apply?
- Fire safety measures appropriate to the property, based on a fire risk assessment.
- Annual gas safety checks and electrical installation checks at least every five years.
- Minimum room sizes and adequate kitchen and bathroom facilities, as set out in the licence.
- Regular checks of shared areas, alarms and fire doors.
Does planning permission matter?
It can. Some councils use Article 4 directions to require planning permission for converting a family home into a small HMO. Check the planning position for the address before converting a property.
Why choose guaranteed rent for an HMO?
Room-by-room letting brings more turnover, more tenants and more compliance work than a single let. A guaranteed rent lease replaces several room rents with one payment, and moves the day-to-day work to the managing company. See our HMO guaranteed rent service.
Licensing and planning rules vary between councils. Always check with the council for the property's address.