Glossary
HMO: House in multiple occupation
A property let by the room to three or more people from more than one household.
What it means
An HMO is a home shared by three or more tenants from two or more households who share a kitchen or bathroom. Letting by the room usually earns more than a single let, but HMOs cost more to run and are more tightly regulated. Five or more sharers need a mandatory licence, many councils license smaller HMOs too, and Article 4 areas need planning permission to convert.
Worked example
ExampleA five-bed house that would let to a family for £1,100 a month, let instead by the room at £550.
- Room rent
- 5 × £550 = £2,750 a month
- Bills you pay
- about £600 a month
- Uplift on a single let
- £2,750 − £600 − £1,100 = £1,050 a month
More income, but more management, licensing and compliance to price in.
Information, not advice. Example figures are fictional and for illustration only.