Shared living is a popular choice in Cambridge, with more people opting for house shares as a flexible way to rent. For landlords, this creates lots of opportunity, but it also comes with a set of rules and responsibilities that are important to understand.
In this guide, we’ll explain what a House in Multiple Occupation (HMO) is, how licensing works and why Cambridge continues to be such a strong market for this type of property.
What is an HMO?
You might know an HMO as a house share. Put simply, it’s a property rented out to at least three people from separate households who share facilities, like a kitchen or bathroom. A property with five or more tenants is called a large HMO and must be licensed by the local authority—in the centre of Cambridge, that’s usually Cambridge City Council. If the property is outside the city, it could fall under a different area, like South Cambridgeshire District Council, so be sure to research carefully.
Whether it’s a large HMO or not, households are defined as a single person, a couple or a family living together.
Understanding Licences and Regulations
When does a property need an HMO licence? You’ll be happy to note that properties with four or fewer tenants usually don’t need a licence. That being said, they still need to meet all the safety standards required.
Landlords must license a property if:
- It is occupied by five or more people forming two or more separate households.
- It is a purpose-built flat in a block of one or two, and five or more people live there as an HMO.
Cambridge City Council might also call for smaller HMOs to be licensed in certain situations, so it’s always worth checking before letting.
The cost of a licence can vary depending on the type of property and your local authority. The application process usually involves submitting details about the house and landlord, and often includes an inspection too. If your HMO has seven or more occupants, you might also need planning and building control permission.
On top of all this, the upcoming Renters’ Rights Bill will introduce changes to housing rules across England. Landlords should plan for new regulations around evictions, rent increases and tenancy agreements. Remember, staying informed about licenses and regulations can help you confidently manage your HMOs.
Why Invest in HMOs in Cambridge?
HMOs are in demand. Many young adults enjoy the social side of living in a house share. This type of property also appeals to people who move frequently for work, those with long hours and tenants who don’t want to manage an entire property alone. The large student population of Cambridge creates a steady demand for shared housing.
While HMOs can be more time-consuming to manage than single-let properties, the rental returns make it worthwhile. In Cambridge, this need gives a gross rental yield of approximately 5.7%.
Learn more about increasing returns in our guide on how to maximise rental income in Cambridge.
Choosing the Right Property
If you’re looking at Cambridge with an HMO in mind, the first step is finding the right house. A three- or four-bedroom semi-detached property is a popular choice. With a few upgrades and tweaks to communal spaces, it could bring in significant returns.
It’s important to find a prime location for your HMO too. Chesterton is great for professionals who want good transport links, especially with Cambridge North train station nearby. Meanwhile, a property near Trumpington might appeal to hospital staff and researchers at the Biomedical Campus. This area’s proximity to Addenbrooke’s Hospital and the M11 makes it especially convenient for tenants who want shorter commutes.
As you view properties, think about how well they’ll work for shared living. Is there space for more than one bathroom? Is the kitchen big enough for several people to cook comfortably? Extras like a garden can also make a big difference.
Managing your HMO
Running an HMO successfully is about balance—keeping tenants safe and happy while making your property profitable.
Here are our top tips for helping you manage your HMO:
- Carry out regular safety checks and fix issues quickly. Remember, HMOs have extra fire safety responsibilities that have to be checked, like risk assessments, fire alarms and clear escape routes.
- Maintain common areas so that they are clean, safe and pleasant for everyone.
- Keep communication open (happy residents stay longer).
- Contact Bush & Co today to appoint us as your specialist HMO lettings agent and take the stress out of managing your property. Plus, read our guide on managing your lettings portfolio in Cambridge.
By following these tips, you’ll protect both your investment and the people living in your property.
Next Steps
Owning an HMO takes a lot of planning, but it can deliver strong results. If you’re weighing up an HMO investment, our team at Bush & Co can provide a market appraisal and offer practical advice for your lettings.
Your next HMO opportunity in Cambridge awaits!
