HMO Additional Licence and Mortgage Provider being informer by the Council
HMO Licensing

AP Landlord
AP Landlord
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2 Posts
2 years ago
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I am in the process of obtaining an HMO licence but not because I rent out to individual separate households (I am not interested in real HMOs as I live next door to the rented property), but only because my Council has now extended the need for an HMO licence to any house with more than 1 households, this means that 1 couple and 1 friend sharing are automatically considered one HMO under the Council additional licencing scheme even if they have been living for many years together as one household.
The Council has stated that, when the licence is being issued, they will inform the Mortgage provider, I have a fully compliant Buy to Let mortgage however my mortgage provider does not normally accept Buy to Let Mortgage products for HMOs so this could cause issues mortgage-wise, however the definition of HMO for my mortgage provider is the one in relation to national Mandatory HMO licensing as per below definition, which is different from the additional licensing scheme definition of the Council, mandatory one is below:
"A Houses in Multiple Occupation (HMO), is defined under sections 254 & 257 of the Housing Act 2004. In Hounslow, with very few exceptions, every house in multiple occupation (HMO) must have a licence.

Nationally any HMO that is occupied by five or more persons who form two or more separate households, and who share basic amenities such as a kitchen, bathroom or toilet, will require a license.

This is known as Mandatory Licensing. "

I do not want my existing mortgage to be jeopardised by the local Council additional licensing scheme because I am still renting to one established household on one single AST agreement and this needs to be reviewed and checked by NRLA as more and more landlords will find themselves potentially breaking mortgage clauses even if this is actually incorrect as mortgage providers normally refer to mandatory HMO licences and not additional HMO licences scheme which have a very different definition of HMO, how can landlords be protected?
How can all landlords be protected in such cases where a property is not rented out by individual rooms (as in a genuine speculative HMO), there is still one single AST in place whilst the Council is still mandating an HMO licence through the additional scheme thus informing the mortgage provider that the property will become an HMO.

Is NRLA working with mortgage providers to fix this very important aberration in the system?
A single AST issued for one established household should not jeopardise a mortgage agreement only because Councils are becoming more and more greedy with landlords.

Thanks for advising asap and let me all have your thoughts.

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