HMO Licensing in England: Mandatory, Additional and Selective Rules Explained
Whether a shared house needs an HMO licence depends on the tenant count and the council. Here are the mandatory, additional and selective schemes, the room-size standards, and the penalties for getting it wrong.
Quick answer: In England you must hold a mandatory HMO licence if your property is let to five or more people forming two or more households who share a kitchen or bathroom, regardless of how many storeys it has. Many councils also run additional licensing (covering smaller HMOs of three or four people) and selective licensing (covering all private rentals in a designated area), so a three-tenant house can still need a licence. Licences last up to five years, fees vary by council, and letting an unlicensed HMO risks a civil penalty of up to £30,000, a rent repayment order of up to 12 months' rent, and the loss of your right to serve a Section 21 notice.
An HMO licence is the permission a council grants to let a house in multiple occupation, and getting the licensing wrong is one of the most expensive mistakes a landlord can make. The rules changed materially in October 2018, and because councils layer their own schemes on top of the national one, whether you need a licence depends as much on the local authority as on the property. This guide explains what counts as an HMO, the three types of licensing, the room and safety standards attached to a licence, and the penalties for getting it wrong.
What counts as an HMO
A house in multiple occupation is a property rented to at least three people who form more than one household and who share facilities such as a kitchen, bathroom or toilet. A "household" is a single person or members of the same family living together, so three unrelated sharers are three households, while a couple counts as one. On this definition a typical shared house of professionals or students is an HMO even when it holds only three tenants.
Being an HMO and needing a licence are two different questions. Every property let to five or more people in two or more households needs a mandatory licence, but a smaller HMO only needs one where the council has introduced additional licensing. The property type also has a planning dimension, covered further down.
The three types of HMO licensing
England runs three overlapping schemes, and a property can be caught by any of them:
| Licence type | What it covers | Who sets it |
|---|---|---|
| Mandatory HMO licence | Any HMO let to 5+ people in 2+ households sharing amenities, any number of storeys | National rule, applies everywhere |
| Additional licensing | Smaller HMOs (typically 3-4 people) in a designated area | Local council |
| Selective licensing | All privately rented homes in a designated area, HMO or not | Local council |
Because additional and selective schemes are local and time-limited, the only reliable way to know is to check the council's website for the exact postcode before you buy or let. You can start from the GOV.UK house in multiple occupation licence service, which routes you to the right local authority. The mandatory scheme has applied to all qualifying HMOs regardless of storeys since 1 October 2018, so older guidance mentioning a "three storeys" test is out of date.
Room sizes and standards attached to a licence
A mandatory HMO licence carries national minimum room standards. A bedroom used by one adult must be at least 6.51 square metres, and a bedroom used by two adults at least 10.22 square metres. Any room under 4.64 square metres cannot be used as sleeping accommodation, and the licence holder must tell the council about rooms below that size. The full standards are set out in the government's HMO licensing reform guidance.
On top of the room sizes, a licence imposes conditions on the number of tenants, the provision of kitchens and bathrooms for the number of occupants, gas and electrical safety, smoke and carbon monoxide alarms, and waste. Councils can also apply their own amenity standards, so two properties of the same size can be licensed for different numbers of tenants in different boroughs.
How to apply, fees and duration
You apply to the local council, name a manager (usually the landlord or agent) who must be a "fit and proper person", and pay a fee that varies widely, commonly several hundred to over a thousand pounds, and lasts up to five years. Budget for the licence when you model an HMO deal, because it is a real cost against yield rather than a one-off formality. To see how licensing, management and voids affect the return on a room-by-room let, run the numbers through our HMO yield calculator before you commit.
Penalties for an unlicensed HMO
Operating a licensable HMO without a licence is a criminal offence, and the financial consequences are severe. A council can impose a civil penalty of up to £30,000 as an alternative to prosecution, or prosecute for an unlimited fine. Tenants or the council can apply for a rent repayment order forcing you to repay up to 12 months' rent. Crucially, you cannot serve a valid Section 21 no-fault eviction notice while the property should be licensed and is not, so you lose control of possession as well. These penalties stack, which is why licensing is checked first in any HMO acquisition.
Planning permission and Article 4
Licensing is separate from planning. A small HMO for three to six people falls in planning use class C4, and in much of the country you can convert a family home (C3) to a small HMO under permitted development rights without a planning application. However, many councils have made an Article 4 direction that removes those rights in designated areas, meaning you need planning permission to create even a small HMO. Larger HMOs of seven or more people always need planning permission. Check both the licensing position and whether an Article 4 direction applies before you buy a property to convert.
Frequently Asked Questions
Do I need a licence for a three-bedroom shared house?
Only if the council runs an additional or selective licensing scheme covering that area. Three unrelated tenants make it an HMO, but the mandatory scheme starts at five people, so a three-tenant house needs a licence only under a local scheme.
Does the number of storeys still matter for mandatory licensing?
No. The old requirement for three or more storeys was removed on 1 October 2018. A mandatory HMO licence now applies to any qualifying HMO of five or more people in two or more households, even a single-storey flat.
How much is an HMO licence?
Fees are set by each council and vary widely, often from a few hundred pounds to over a thousand, and a licence lasts up to five years. Check the specific council's fee schedule, as there is no national figure.
What is the difference between additional and selective licensing?
Additional licensing covers smaller HMOs not caught by the mandatory scheme. Selective licensing covers all privately rented homes in a designated area, whether or not they are HMOs. A property can fall under one, both or neither depending on where it is.
Can I be fined for renting an unlicensed HMO?
Yes. Councils can impose a civil penalty of up to £30,000 or prosecute for an unlimited fine, tenants can reclaim up to 12 months' rent through a rent repayment order, and you cannot serve a valid Section 21 notice while unlicensed.
Key Takeaways
- A mandatory HMO licence is required for any HMO of five or more people in two or more households, regardless of storeys, since October 2018.
- Councils run additional licensing for smaller HMOs and selective licensing for all rentals, so a three-tenant house can still need a licence.
- National room minimums are 6.51 square metres for one adult and 10.22 square metres for two; rooms under 4.64 square metres cannot be bedrooms.
- An unlicensed HMO risks up to a £30,000 civil penalty, a 12-month rent repayment order, and loss of Section 21.
- Licensing is separate from planning: check for an Article 4 direction before converting a family home to an HMO.
This article is general information for England, not legal advice. HMO definitions, licensing schemes and standards differ in Wales, Scotland and Northern Ireland and change over time. Confirm the current position with the relevant local council and GOV.UK before letting or converting a property.