Making sure I understand HMO rules

I’m looking to rent out part of my house. It’s three floors, seven bedrooms.

I’m thinking about removing the staircase from the ground floor to first floor so me and my family have the first floor and second floor, while any tenants would have the ground floor.

The ground floor has four bedrooms, a bathroom and a kitchen/dining room. I would either rent it out to a family, or a group of people.

From what I’ve read, for it to be a HMO it needs to satisfy both the following:

  1. At least 3 tenants live there, forming more than 1 household
  2. There are shared facilities such as toilet, bathroom or kitchen facilities

Number 1. applies, but I’m struggling to understand 2.

If I let the ground floor out to a family, then the whole property has two households. Those two households will have their own bathrooms and kitchen so I believe in this case the setup would not be considered an HMO.

If I let the ground floor out to lets say a group of four students then the whole property would have five households. The four households in the ground floor would be sharing a bathroom and kitchen and this would be classed as an HMO.

Is that correct?

There are different types of HMO. You would be better asking the local council

Firstly, you will probably need planning and building regs approval to remove stairs as you are effectively dividing the property into 2 dwellings. You may also need planning consent to create an HMO in your area and would certainly need it for 7 or more occupants. Your family would count toward the number of occupants.

You are allowed 2 lodgers before you create an HMO. Once youve got to 3 or more, then if the total number of house occupants is 5 or more, you would need an HMO licence. In some areas you need a licence for 3 or more if its an HMO. The local licensing conditions will be on your Councils website, but you should expect to have to install fire doors and wired smoke/heat/CO alarms at a minimum.

If you are not sharing living space, the lodgers would be non-assured tenants with basic protection, which means you probably need a court order to remove them.

My advice would be sell the house and downsize instead.