Buy-to-let investors who rent property to large groups or students are being warned to keep abreast with changes to the Homes in Multiple Occupation (HMO) or risk incurring a heavy penalty.
The Association of Residential Letting Agents (ARLA) has said that many local authorities are currently planning amendments to their rules concerning lets of homes to groups of unrelated people.
Until April last year a landlord only needed an HMO licence if the property had six or more unrelated tenants, sharing amenities over three levels.
However, despite the rule being changed, local authorities could decide whether to implement the new regulations, which ask for licence to be in place for any home with three to six tenants who share common facilities
But a new amendment, known as Article Four, is likely to mean the rule will become mandatory and landlords who do not conform run risk being hit with a whopping fine.
Ian Potter, ARLA's operations manager at ARLA, warned: "There is no room for complacency - failure to comply could result in a hefty fine."
Research by Paragon found that student lets still offer the best yield to landlords at 7.62 per cent.
Landlord and Tenant News
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