For many graduates and young professionals, it makes economic sense to live in shared housing. It provides the freedom of not living with parents and being closer to job opportunities, but without the high expense of living alone, especially in big cities.
Many students live with housemates during university. Although professional living shares similarities with student housing, it can come with some additional complications to be aware of before moving in.
A property qualifies as a house in multiple occupation (HMO) if it’s occupied by at least three tenants–forming more than one household–who share communal areas such as a kitchen or bathroom. A large HMO has five or more tenants and is at least three storeys high. Both students and professionals can occupy HMOs.
Hannah Davies, national lettings director at Reeds Rains, said: “The style of living in HMO and student accommodation is usually very similar. But you tend to find that as time moves on (after leaving education) the tenant prefers to choose a better-quality HMO.”
Professional houses are generally of a higher quality, which can result in a higher charge. The rent charge will also differ depending on the city. Professional houses are usually located near good transport links, whereas student houses are normally centred around university campuses.
Both joint and sole tenancies are commonly used in HMOs. Student houses are usually rented with joint tenancy agreements. Sole tenancies are generally more popular in professional accommodation as housemates often move in separately and are unacquainted prior to living together.
A sole tenancy agreement also allows tenants to move out independently. Whereas, with a joint tenancy, if somebody moves out before the contract expires or doesn’t pay rent on time, all tenants are responsible for the contract breach.
The tenancy agreement should stipulate who is responsible for utilities. Landlords sometimes include this cost into the rent, especially if everybody has sole contracts.
Ashley Tate, chief executive officer at Split The Bills said: “If you have to pay bills separately, an organised system must be formed. Otherwise, payments can easily be made late, or some housemates may end up paying more than others.”
Creating a joint account allows everybody to be fully aware of the utility charges. But this can be tricky when tenants don’t yet know or trust each other. If the account goes overdrawn or one person has a poor credit history, it could have a bad effect on everybody else’s credit rating.
It might be more suitable to transfer monthly payments into one tenant’s account. But if the bills are put under one person’s name, they will be liable for any late payments.
“A bill-splitting tool can divide all payments into one monthly cost per tenant. This ensures the responsibility doesn’t fall on one person and makes sure everybody pays their fair share. But you would need to budget for the minor cost of this service,” Ashley continued.
It varies on the tenancy agreement, but TV licences are often not paid for by landlords, unless they provide the TV. If everyone has sole tenancies, each housemate will need individual TV licences to cover their room. Renters with joint tenancies will only need one TV licence to cover the entire house.
Landlords of HMO properties are liable to pay Council Tax. Students are not required to pay for council tax but must register as a ‘disregarded person’ with the local council to avoid any charges.
Landlords of HMO properties (student or professional) with five or more tenants, or two or more separate households living there, are legally required to obtain a HMO licence. In some areas, smaller HMOs also need a licence.
Paul Richardson, director of Deposit Recovery Claims RTD, the owner of The Tenants Voice, said: “An HMO licence puts a safeguard in place to ensure that landlords are fit and proper (i.e. no criminal convictions etc) and that the property is safe for the tenants.
“If, however, the landlord does not obtain a required licence, and the tenant discovers this after moving into the property, then they are entitled to make an application for a rent repayment order in which they could claim back up to 12 months’ worth of rent.”
However, some councils require all private landlords to obtain a HMO licence. But a HMO licence isn’t required if the property is managed or owned by a council, health service, police, fire authority, housing association or co-operative.
Hannah Davies said: “A good agent will hold the licence on file. Most councils will also advise if a property is licenced or not.
“If the property was non-compliant or a landlord was refusing to do maintenance work on the property, tenants can initially make a complaint to their local council or environmental health.”
According to Shelter England, landlords of HMOs are also responsible for making sure that:
Living with a group of people you don’t know can be challenging. People might have different cleaning standards or personal space preferences. Without honest communication and set boundaries, this can easily lead to heated arguments. If you’re on a sole tenancy, check if there are any rules or cleaning rotas in place when you move in.
Paul Richardson said: “Tenants don’t often consider the impact of living with several strangers in such proximity, especially when they may be sharing a bathroom or kitchen. This is something that tenants must consider carefully, especially when they are required to stay in a property for a specified duration.”
Sharing accommodation with young professionals, who may all be at different stages in their lives, can come with added complications which might not arise when living with students.
Ashley Tate said: “Living in student houses is great preparation for living in professional housing. It teaches you how to be a good housemate, what to do and what not to do. But students generally have more flexibility than people working full-time jobs.
“You might find that your housemates have opposite routines to you, due to different shift patterns or work schedules. If this is the case, be respectful when leaving and entering the home and don’t make too much noise that could disrupt anybody’s sleep.”
Different salaries could also cause tension if some housemates can afford to socialise more than others, or want to invest more in décor or utility packages. To avoid any arguments over this, tenants should be honest about their financial situation, suggest having more nights in, and compromise on a home budget that works for all wages.
Hannah Davies said: “Many people living in HMOs tend to be moving to the area from other locations and are drawn to the social aspect of a shared living space.
“However, this transient style of living doesn’t suit everyone. Often you may not know who you will be sharing with and there could be regular changes. The main problem that occurs between housemates in HMO housing is a breakdown in relationships.”
Transitioning from student accommodation to professional housing can be a daunting and exciting time, making it easy to overlook contract terms and be hit with surprises later down the line. To avoid any issues arising, check that the property, current tenants and tenancy agreement are suitable before moving in.
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