There are two distinctions to make when it comes to developing HMOs and that is obtaining planning and obtaining a HMO license.
Planning
To convert a property to a HMO, you need planning as it is a change of use from a C3 to a C4. So before purchasing a property or starting any development, speak to your local planning officer.
In some cases converting a property to a HMO is permissible under what is called Permitted Development, which overrides the national planning rules but this can differ from road to road and even house number to house number so it is always worth checking with the council first. In this case converting a house to a HMO for up to 6 people is allowed without prior planning approval.
In all circumstances, Permitted Development or not, in order to convert a house to a HMO for more than 6 people requires planning and this is called Sui Generis.
License
Many investors get confused between obtaining planning and obtaining a license. The two are very different.
A license is required for any property that has 5 or more occupants from 2 or more households. To obtain a license the property has to be HMO compliant and by that we mean the right amenity standards and that the right paperwork and checks are complied with and these can be really complicated.
It is worth checking with your council as they will have a mandatory license based on 5 people but may also have selective licensing for above 3 people, so do check as you may be liable for fines running into the tens of thousands.
In addition, a common misconception is that a license is tied to a property. As a matter of fact it is not, so if a property is purchased as a HMO, a new license needs to be applied for and there is no guarantee you will get one.
