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HMO Insurance

If you are a buy to let landlord, there may be good reasons for investing in a House in Multiple Occupation (HMO) – not least because the rental yields may be up to three times higher, says Property Investments UK.

What does HMO stand for in housing?

An HMO is any let accommodation for three or more tenants who live as more than one household and share essential facilities such as the toilet and bathroom or kitchen.

HMO Insurance

HMO’s occupy a special place in the range of different kinds of private rented accommodation – and, because of that, require a specialist form of landlord’s insurance, namely HMO insurance.

Get your HMO landlords insurance quote here.

What does HMO insurance cover?

The landlord HMO insurance arranged by us here at Cover4LetProperty is not only the specialist form of business cover you need but, on top of the standard protection you would expect with traditional landlord insurance, offers a number of extras and additional features too:

Number of tenants

  • the number of tenants accommodated in your property determines the level of risk;
  • HMO landlord insurance cover is available for up to a maximum of 10 tenants in a single property – with attractive discounts available if your HMO accommodates between three and six tenants only;

Type of tenant

  • unlike some other landlord insurance providers, we can provide HMO insurance for your chosen tenant market – including asylum seekers, local authority placements, tenants in receipt of housing benefit or universal credit, students, and of course, professional and retired individuals;

Contents insurance

  • HMO landlord insurance may incorporate cover for any contents owned by the landlord, including optional protection against accidental damage (provided the total number of tenants is less than seven);

Malicious damage

  • unlike many other insurance policies, ours may also offer cover against malicious damage caused by your tenants or their visitors;
  • where more than six tenants occupy the property, however, that malicious damage cover may attract an excess of up to £1,000;

Cover for loss of rental income

  • your business depends on a steady stream of rent from your tenants;
  • in the event of a serious insured event in which the property becomes wholly or partly uninhabitable, however, you stand to suffer a loss of rental income;
  • our landlord insurance HMO, therefore, incorporates compensation for any such loss of rent – up to 20% of the building insurance rebuild value;

Bedsits

  • insurance is also available if some or all of the units of accommodation in your HMO are bedsits;
  • if you allow tenants to have cooking facilities in any rooms other than purpose-designed kitchens, however, we are unable to provide cover;

Resident owners

  • if you are an owner and landlord who also lives on the premises, we are unable to provide an online insurance quote for your HMO insurance – so, please give us a call on 01702 606301.

HMO insurance is specialist insurance, and here at Cover4LetProperty, we are specialists in the provision of the cover you need for any House in Multiple Occupation. The additional features of the HMO landlord insurance cover we arrange may ensure that you obtain the insurance you need at what we believe is a competitive price.

HMO and insurance frequently asked questions

Here are some FAQ’s concerning houses in multiple occupation and landlord insurance. We hope you find them useful, but if you do have any questions, please feel free to ‘phone us on 01702 606301 – we’d be delighted to help.

We have also published a detailed guide to HMOs for landlords.

What is an HMO?

This type of let property is formally defined as a House in Multiple Occupation (HMO) – and, as such, imposes upon the landlord particular obligations and responsibilities and requires a purpose-designed form of let property insurance specifically intended for landlords of HMOs.

An HMO is a property in which:

  • three or more unrelated individuals live as at least two separate households (three single people, or a couple and one single person, for example);
  • the three people or more who live there share certain basic facilities, such as a kitchen and/or toilet and bathroom;
  • if the property is spread over three storeys or more and has at least five individuals living as more than two separate households, all of whom share some of the basic facilities, the dwelling is defined as a large HMO.

What is an HMO licence? How long does an HMO licence last?

If you are a landlord, you must get a licence from the council if the houses in multiple occupation:

  • have five or more unrelated people live in it;
  • have two or more separate households living there.

Some councils also require other HMOs to be licensed. Some councils require all private landlords to get a licence, so make sure you check with your local authority.

A licence typically lasts for five years from the date of issue, but there can be exceptions.

What should I consider if converting a buy to let property to an HMO?

One of your first considerations is whether the property itself is suitable for conversion into an HMO – some are, some are less well suited to such use.

For example, new or fully-modernised buildings are likely to serve well as HMOs – and be easier to service and maintain – than older conversions, requiring more frequent repairs.

They are also likely to offer more basic, functional accommodation – simply decorated in neutral colours, plainer furnishings and hard-wearing floor coverings.

In other words, deciding whether to convert your property into an HMO depends on your being able to identify a suitable market.

Affordable rent is likely to be more important to your tenants, rather than an especially high standard of furnishing, decoration or neighbourhood, although access to centres of activity for jobs and shops is likely to be important.

HMOs are typically attractive to money-conscious students – who are going to be looking for quick and easy to access their university or college campus – and the unemployed or those on benefits.

When letting a house in multiple occupation, therefore, it is vital to conduct thorough and rigorous background and credit checks on potential residents.

What does an HMO need -know your obligations

On top of having appropriate insurance for your house in multiple occupation, There are additional responsibilities and obligations you have as the landlord of an HMO:

  • these include a set of requirements common to landlords of any let property, but additional ones that form part of the licence you may require from the local authority when registering the property – some standard HMOs and all large HMOs require such a licence;
  • an annual inspection of the gas installation and its appliances must be made by a registered Gas Safe engineer;
  • you must give a copy of the safety certificate he issues to the building’s residents;
  • you must ensure that the electrics are safe and in good working order – sockets, fittings and appliances – so may need to carry out periodic inspections to confirm that this is the case;
  • given the life and death importance of fire safety, you must abide by any local and national fire regulations concerning exit routes and ensure that smoke alarms are fitted on every floor of the building and carbon monoxide detectors are in any room where there is a solid-fuel fire;
  • you may ask your tenants for a deposit – against possible breakages and damage – at the beginning of the tenancy, but the money must be placed on deposit with an approved third party in compliance with the official Tenancy Deposit Protection scheme;
  • residents of an HMO also need to prove that their immigration status gives them a right of residence in the UK and the right to rent your accommodation (in England) – you or your letting agent must keep records of your having made those checks.

How we can help

At Cover4LetProperty, we are a business registered in England and Wales and regulated by the Financial Conduct Authority, so you can be confident that you are dealing with a reputable insurance provider. Please call us today to see how we can help find you the most suitable and cost-effective property insurance for your HMO.