HMO licensing catches out more landlords than almost any other regulation. The rules vary by area, the penalties are severe, and many landlords don't realise they need a licence until enforcement action begins.

This guide explains when you need an HMO licence, how the application process works, what it costs, and what happens if you get it wrong.

Quick Navigation

• What Is an HMO?
• When Do You Need a Licence?
• Mandatory Licensing Explained
• Additional Licensing Schemes
• Selective Licensing
• The Application Process
• Licence Fees and Costs
• Licence Conditions
• Penalties for Operating Without a Licence
• Licence Renewal
• HMO Licensing Checklist

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What Is an HMO?

Before discussing licensing, you need to understand what legally constitutes an HMO. The definition is broader than many landlords expect.

The Legal Definition

Under the Housing Act 2004, a property is an HMO if:

• It is occupied by three or more people forming two or more households
• They share amenities such as a kitchen, bathroom, or toilet
• It is their only or main residence
• Rent is payable (or other consideration)

What Counts as a "Household"?

A household is typically:

• A single person living alone
• A couple (married, civil partners, or cohabiting)
• A family unit (parents and children)
• People who are related

Two friends sharing a flat are two separate households. A couple sharing with one other person creates two households.

Common HMO Scenarios

Definitely an HMO:

• Student house with 4 unrelated students sharing a kitchen
• Professional house share with 3 young professionals
• Property let room-by-room to individual tenants

Not usually an HMO:

• Family home let to a single family
• Flat shared by a couple
• Owner-occupied property with one lodger

Grey areas (seek advice):

• Flat shared by two couples
• Property with live-in landlord and multiple lodgers
• Short-term lets and serviced accommodation

The "Main Residence" Test

The property must be the occupants' only or main residence. This excludes:

• Holiday lets
• Hotels and B&Bs
• Student halls of residence owned by educational institutions
• Properties where occupants have a main home elsewhere

However, a property let to students during term time is still their main residence for licensing purposes, even if they go home during holidays.

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When Do You Need a Licence?

There are three types of licensing that may apply to your HMO:

1. Mandatory licensing — Applies nationwide based on property size and occupancy
2. Additional licensing — Council-specific schemes covering smaller HMOs
3. Selective licensing — Council-specific schemes covering all private rentals in certain areas

You may need more than one type of licence, or different licences may overlap in your area.

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Mandatory Licensing Explained

Mandatory HMO licensing applies across England regardless of where your property is located. If your HMO meets the criteria, you must have a licence.

The Mandatory Licensing Threshold

Since October 2018, mandatory licensing applies to any HMO that is:

• Occupied by five or more people
• Forming two or more households
• Regardless of the number of storeys

Before 2018, mandatory licensing only applied to HMOs with three or more storeys. This change brought hundreds of thousands of additional properties into licensing requirements.

Examples

Requires mandatory licence:

• 5-bed house share with 5 unrelated tenants (5 people, 5 households)
• 4-bed house with a couple and 3 singles (5 people, 4 households)
• 3-bed flat with 6 students (6 people, 6 households)

Does not require mandatory licence:

• 4-bed house with 4 unrelated tenants (4 people, 4 households)
• 3-bed house let to a family of 6 (6 people, 1 household)
• 2-bed flat shared by two couples (4 people, 2 households)

Count people, not bedrooms. A 4-bed HMO with couples in two of the rooms could house 6 people—triggering mandatory licensing even though it only has 4 bedrooms.

No Exemptions

There are very few exemptions from mandatory licensing. Being unaware of the requirement is not a defence. The main exemptions are:

• Properties managed by local authorities or registered social landlords
• Properties managed by educational institutions for students
• Religious communities under certain conditions
• Properties with resident landlords (limited exemptions)

If you're unsure whether your property qualifies for an exemption, assume it doesn't and apply for a licence.

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Additional Licensing Schemes

Many councils operate additional licensing schemes that cover HMOs below the mandatory threshold.

What Additional Licensing Covers

Additional licensing typically applies to:

• HMOs with 3 or 4 occupants forming 2+ households
• Specific property types (e.g., flats above shops)
• Properties in designated areas
• All HMOs regardless of size (in some schemes)

How to Check If Additional Licensing Applies

1. Search your council's website for "HMO licensing" or "additional licensing"
2. Use the council's property licensing checker tool (if available)
3. Contact the council's private sector housing team directly
4. Check if specific streets or postcodes are included in the scheme

Additional Licensing Is Area-Specific

Not all councils have additional licensing. Those that do may only apply it to certain wards or neighbourhoods. A property in one street may require additional licensing while an identical property in the next street may not.

Scheme Duration

Additional licensing schemes must be renewed every five years. Councils must consult before implementing or renewing schemes. Check when your local scheme was introduced and when it expires—a property might be licensed today but not require licensing when the scheme ends.

Common mistake: Assuming that because you didn't need a licence before, you don't need one now. New additional licensing schemes are introduced regularly.

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Selective Licensing

Selective licensing is different from HMO licensing. It applies to all private rented properties in designated areas, not just HMOs.

How Selective Licensing Works

Under selective licensing:

• All privately rented properties in the designated area need a licence
• This includes single-family lets, not just HMOs
• The scheme targets areas with low housing demand, anti-social behaviour, or poor property conditions

Selective Licensing and HMO Licensing

If your property is in a selective licensing area AND is an HMO:

• You may need both a selective licence and an HMO licence
• Or the HMO licence may cover both requirements
• Check with your council—requirements vary

Finding Selective Licensing Areas

Use the government's selective licensing checker or contact your council. Selective licensing areas are often in:

• Areas with high deprivation
• Neighbourhoods with anti-social behaviour problems
• Areas with poor housing conditions
• Low-demand housing markets

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The Application Process

Applying for an HMO licence is straightforward but requires preparation. Missing information delays applications and can result in rejection.

Step 1: Gather Required Information

Before starting your application, collect:

Property details:

• Full address and property description
• Number of storeys and rooms
• Details of amenities (kitchens, bathrooms, toilets)
• Floor plans showing room sizes
• Gas safety certificate (current)
• Electrical safety certificate (EICR, within 5 years)
• Fire risk assessment

Applicant details:

• Your full name and contact details
• National Insurance number
• Proof of identity (passport or driving licence)
• Proof of address
• Details of any managing agents

Fit and proper person information:

• Disclosure of any unspent criminal convictions
• Details of any previous licensing refusals or revocations
• Information about any housing-related enforcement action
• Declaration of any associations with people who wouldn't pass fit and proper tests

Step 2: Complete the Application Form

Most councils offer online applications. The form will ask for:

• Property details and proposed maximum occupancy
• Details of the licence holder (usually the owner)
• Details of any manager (if different from licence holder)
• Information about safety certificates and compliance
• Fit and proper person declarations
• Payment of the application fee

Step 3: Submit Supporting Documents

Upload or submit:

• Gas safety certificate
• EICR (Electrical Installation Condition Report)
• Floor plans with room dimensions
• Fire risk assessment
• Proof of identity and address
• Any other documents requested

Step 4: Property Inspection

After submission, the council will typically:

• Review your application for completeness
• Schedule a property inspection
• Check room sizes, amenities, and safety measures
• Identify any works required before licensing

Not all councils inspect before granting a licence. Some issue licences based on the application and inspect later.

Step 5: Receive Your Licence

If your application is approved:

• You'll receive a licence document with conditions
• The licence specifies maximum occupancy per room and total
• Conditions detail your ongoing obligations
• The licence is typically valid for up to 5 years

Application Timeframes

Standard processing times vary significantly:

Council Type	Typical Timeframe
Efficient councils	4-8 weeks
Average councils	8-16 weeks
Backlogged councils	3-6 months or longer

Some councils issue draft licences quickly but take months to issue final licences. You can operate legally once you've submitted a valid application, even if the licence hasn't been granted yet.

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Licence Fees and Costs

HMO licence fees vary dramatically between councils. There's no national cap on fees.

Typical Fee Ranges

Licence Type	Typical Fee Range
Mandatory HMO	£500 - £1,500
Additional licensing	£400 - £1,200
Selective licensing	£300 - £900

Factors Affecting Fees

Fees often depend on:

• Property size — More bedrooms usually means higher fees
• Number of occupants — Some councils charge per occupant
• Payment timing — Discounts for early payment or online applications
• Accreditation — Some councils offer discounts for accredited landlords
• Compliance history — Higher fees for landlords with enforcement history

Fee Structures

Councils typically use one of these structures:

Flat fee: Same charge regardless of property size Tiered fee: Different rates based on number of bedrooms or occupants Two-part fee: Initial application fee plus licence issue fee Annual fee: Some selective schemes charge yearly

Additional Costs to Budget For

Beyond the licence fee, budget for:

• Gas safety certificate: £60-£90 annually
• EICR: £150-£300 (every 5 years)
• Fire risk assessment: £150-£400
• Any remedial works required for compliance
• Professional fees if using a licensing service

Some councils offer payment plans for licence fees—worth asking about if you're managing multiple properties.

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Licence Conditions

Every HMO licence comes with conditions. Breaching these conditions is a criminal offence.

Mandatory Conditions

All HMO licences must include conditions requiring the licence holder to:

• Produce gas safety certificates annually
• Keep electrical appliances safe
• Keep furniture and furnishings safe (fire safety regulations)
• Install smoke alarms and keep them working
• Provide carbon monoxide alarms where required
• Provide written tenancy terms to occupiers
• Comply with the room size standards

Maximum Occupancy

Your licence will specify:

• Maximum number of people in each bedroom
• Maximum total occupants for the property
• Which rooms can be used as sleeping accommodation

Exceeding these numbers—even temporarily—is a licence breach.

Discretionary Conditions

Councils can add additional conditions such as:

• Requirements for specific safety equipment
• Restrictions on room usage
• Waste management requirements
• Anti-social behaviour management
• Property maintenance standards
• Notification requirements for changes

Displaying Your Licence

You must display your licence prominently in the property or provide a copy to each tenant. Failure to do this is itself a breach of licence conditions.

Changing Licence Conditions

If conditions are unreasonable, you can:

• Request a variation from the council
• Appeal to the First-tier Tribunal
• Seek legal advice on your options

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Penalties for Operating Without a Licence

Operating an unlicensed HMO carries some of the most severe penalties in housing law.

Criminal Prosecution

Operating without a licence is a criminal offence punishable by:

• Unlimited fines — Courts can impose any fine amount they consider appropriate
• Criminal record — Affecting your ability to obtain future licences
• Prosecution costs — You'll pay the council's legal costs if convicted

Civil Penalties

As an alternative to prosecution, councils can issue civil penalties:

• Up to £30,000 per offence
• Multiple penalties can be issued for ongoing breaches
• Penalties must be paid even if you subsequently obtain a licence
• Non-payment can result in county court judgments affecting your credit

Rent Repayment Orders

Tenants in unlicensed HMOs can apply to the First-tier Tribunal for rent repayment orders:

• Covering up to 12 months' rent per tenant
• The tribunal decides how much to award based on circumstances
• Councils can also apply for rent repayment orders for Housing Benefit paid
• Orders are made against the landlord personally

Example: A 6-bed unlicensed HMO charging £500/room could face rent repayment claims of £36,000 (6 tenants × £500 × 12 months) plus civil penalties of £30,000. Total exposure: £66,000.

Banning Orders

Serious or repeat offenders can face banning orders:

• Prohibiting you from letting property or acting as an agent
• Duration of at least 12 months
• Breach of a banning order is a criminal offence
• Your name appears on the national database of banned landlords

No Licence = No Section 21

You cannot serve a valid Section 21 eviction notice while operating without a required licence. This means:

• You cannot use "no-fault" eviction
• Problem tenants become much harder to remove
• You're reliant on Section 8 grounds, which require proving breaches

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Licence Renewal

HMO licences typically last for a maximum of five years. You must apply to renew before the current licence expires.

When to Apply for Renewal

• Apply at least three months before expiry
• Some councils send reminders, but don't rely on this
• Set calendar reminders for all your licence renewal dates
• Late applications may result in gaps in licensing

Renewal Requirements

To renew, you'll need to:

• Complete a new application form
• Provide updated safety certificates
• Pay the renewal fee
• Declare any changes since the original licence
• Confirm continued fit and proper person status

Changes Since Original Licence

When renewing, you must disclose:

• Any criminal convictions since the original application
• Any enforcement action taken against you
• Changes to managing agents
• Material changes to the property
• Any other matters affecting fit and proper person status

Renewal Fees

Renewal fees are often similar to original application fees, though some councils offer:

• Early renewal discounts
• Reduced fees for compliant landlords
• Higher fees if compliance issues were found

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HMO Licensing Checklist

Use this checklist to ensure you're properly licensed and compliant.

Determining Licence Requirements

• Confirmed property meets HMO definition
• Counted occupants (people, not bedrooms)
• Identified number of households
• Checked mandatory licensing threshold (5+ people, 2+ households)
• Checked for additional licensing scheme in area
• Checked for selective licensing in area
• Confirmed which licence(s) required

Before Applying

• Gas safety certificate current
• EICR completed (within 5 years)
• Fire risk assessment completed
• Floor plans prepared with room measurements
• All rooms meet minimum size requirements
• Fire safety measures in place
• Proof of identity ready
• Fit and proper person declaration prepared

Application Process

• Application form completed fully
• All supporting documents uploaded/submitted
• Application fee paid
• Confirmation of submission received
• Reference number recorded
• Follow-up scheduled if no response

After Licence Granted

• Licence conditions reviewed and understood
• Maximum occupancy noted and communicated to agents
• Licence displayed in property or provided to tenants
• Renewal date added to calendar (apply 3 months early)
• Ongoing compliance schedule established
• Gas safety renewal scheduled
• EICR renewal scheduled (if due within licence period)

Ongoing Compliance

• Annual gas safety certificates obtained
• Smoke and CO alarms tested regularly
• Fire risk assessment reviewed annually
• Occupancy within licensed limits
• Any changes notified to council
• Records kept of all compliance activities

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The Reality

HMO licensing is bureaucratic and varies by council, but the penalties for getting it wrong are severe enough that it's worth the effort to get right. The main thing to remember: check requirements before you buy, not after. A property that doesn't meet licensing standards—or can't be brought up to standard economically—isn't a viable HMO investment.

If you're planning a conversion and want to understand what licensing will require, get in touch—we work with councils regularly and can point you in the right direction.

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This guide was last updated in January 2026. Licensing requirements and fees change regularly. Always verify current requirements with your local council's licensing team.