HMO / Student Lets, whats is the difference
Posted on 21st January 2025 at 07:48
Understanding the Difference Between Student Lets and HMO Letting
If you're a landlord or considering investing in property, you may have come across terms like "student lets" and "HMOs" (Houses in Multiple Occupation). While they might seem similar at first glance, there are key differences that are important to understand.
What is a Student Let?
A student let is a property rented specifically to students, usually attending a university or college. These properties are often located near campuses, making them convenient for tenants. Typically, the entire property is rented out to a group of students who know each other, such as friends sharing a house. They often sign a joint tenancy agreement, meaning all tenants are equally responsible for rent and any damages.
What is an HMO?
An HMO is a property where multiple people live together but are not part of the same household or family. Unlike student lets, tenants in an HMO often rent individual rooms and might not know each other. Each tenant typically has their own tenancy agreement, and common areas like the kitchen or living room are shared.
The Main Differences
The key difference lies in how the property is rented and managed. Student lets usually involve a group agreement, while HMOs are usually set up with individual agreements for each tenant. This affects how the property is structured legally and financially.
Student let properties are not always full all year round too. With students leaving to go home for the summer, landlords need to consider the drop in income or even insurance issues with unoccupied properties.
Management and Licensing
HMOs often require a specific license from the local council, as they are subject to stricter regulations around fire safety, room sizes, and facilities. Student lets, on the other hand, might not need an HMO license if the property doesn’t meet the official definition of an HMO (e.g., it’s let to a single group under one agreement). This is area and property specific. Seek guidance from your local authority as well as the government rules for this.
Who Should Consider Each Option?
If you’re letting a property in a university town and prefer dealing with one group of tenants on a single agreement, a student let might suit you. However, if you’re looking for higher rental income and don’t mind managing multiple agreements, an HMO could be a better fit. Just be aware of the added responsibilities and regulations that come with HMOs.
Understanding these differences can help you make the right choice for your investment. Whether you opt for student lets or an HMO, ensuring your property meets legal standards and suits your management style is key. If you're unsure which route to take, a mortgage adviser or property expert can help you navigate the options.What are the Business Moneyfacts Awards?
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