acprops Posted June 8, 2014 Report Share Posted June 8, 2014 I have a portfolio of 15 houses in North London. The local council has just introduced additional HMO licensing whereby small HMOs like mine i.e 3 or 4 sharers in a 2 storey house will need to be licensed. I purchased my properties all using normal BTL mortgages and the problem i have is that if i continue to rent the houses as i am doing to small sharers, i will be in breach of the HMO law and could face a large fine of to £25K, however if i do the work to make it a HMO and apply for a HMO license, this will inform my existing mortgage lender and i will be in a breach of mortgage, due to the council writing to my lender advising them that a license has been applied for. So i am stuck as what to do with my portfolio now... i understand that most HMO lenders lend only on properties whereby there is a licence in place, but you cannot get a licence until the work is done and applied for through the council, so there seems to always be a point where you are in breach with someone. Catch 22. I therefore see no option but to continue to rent my properties as is which are now illegal or sell up. Is anyone else in this situation? Any advice would be very much appreciated as to how to proceed from here..? Link to comment Share on other sites More sharing options...
Melboy Posted June 8, 2014 Report Share Posted June 8, 2014 If you have a BTL mortgage in place already on all your properties and they are currently all at HMO standard what are the additional HMO requirements that you have to fulfill to the Council licensing program? Becoming illegal is not an option for you I would suggest. Link to comment Share on other sites More sharing options...
Mortitia Posted June 9, 2014 Report Share Posted June 9, 2014 A lot of councils are going down this route to counteract the 'rogue landlord' and get rid of as many HMOs as they can. Comply or die. Could be the banks may take a lenient approach if you are up to date with your payments. Don't think the council will let you get away with this - for them it is a money making exercise as well as cleaning up areas. I have had recent talks at my LA and was told they have been given funds from central government to achieve this. Be aware! Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.