What Is an HMO?
A house in multiple occupation (HMO) is a property let to at least three tenants who form more than one household and share a toilet, bathroom or kitchen (GOV.UK; Housing Act 2004, s.254). A household is a single person, or members of the same family living together. Couples count as one household.
Some examples:
Three unrelated friends share a rented house and its kitchen. That is three households, so it is an HMO.
A mother, father and three children rent a house. That is one household, so it is not an HMO.
Five unrelated sharers rent a house. This is an HMO and large enough to require a mandatory licence.
The tenants must live there as their only or main home. The type of tenancy agreement does not decide whether a property is an HMO, and since 01/10/2018 the number of storeys no longer matters.
Do You Need an HMO Licence?
Three types of licensing exist. Which one applies depends on the HMO's size and location.
Type | Who sets it | What it covers |
|---|---|---|
Mandatory | Government (national rule) | HMOs with 5+ people in 2+ households sharing facilities |
Additional | Your council, in a designated area | Smaller HMOs the council chooses to include, such as 3 or 4 tenants |
Selective | Your council, in a designated area | Other privately rented homes, not only HMOs |
Sources: Housing Act 2004, ss.55–56 and Part 3; Licensing of HMOs (Prescribed Description) (England) Order 2018.
Mandatory Licensing
GOV.UK says your property is a large HMO needing a licence if all three apply:
It is rented to 5 or more people who form more than 1 household.
Some or all tenants share a toilet, bathroom or kitchen.
At least 1 tenant pays rent, or their employer pays it.
There is one main exception: a flat in a purpose-built block of three or more flats is not covered by mandatory licensing (MHCLG guidance, 2018). Councils can bring these into an additional scheme.
Additional and Selective Licensing
A council can introduce additional licensing where it considers that a significant proportion of HMOs in an area are so poorly managed that they cause problems. It must consult first, and a scheme lasts no more than five years. City of York Council, for example, licenses HMOs with 3 or 4 tenants across 8 wards.
Selective licensing can cover every private let in an area. In Thurrock's selective licensing wards, for example, every privately rented property needs a licence, whatever its size.
How Do You Check Your Council's Scheme?
Enter your postcode on the GOV.UK HMO licence page to find your council.
Check the council's HMO licensing page for any additional or selective schemes.
If you are unsure, ask the council before you let.
How Do You Apply for an HMO Licence?
You apply to your local council (Housing Act 2004, s.63). Details vary, but the steps are usually these:
Confirm the licence type with your council.
Choose the licence holder and manager: GOV.UK says you should apply yourself, although a managing agent can apply on your behalf. The licence holder must be the most appropriate person, normally the person in control of the property.
Gather your documents: Woking Borough Council, for example, asks for a floor plan, fire risk assessment, Electrical Installation Condition Report, Gas Safe certificate (if applicable), automatic fire detection certificate and PAT certificate. Enfield Council asks for the licence holder's name, address and date of birth. Check your own council's list.
Pay the fee and submit: Many councils accept applications online.
Wait for the council's checks: It assesses whether the house suits the number of occupants and whether you and your manager are fit and proper. It may inspect.
Receive the decision: The council grants a licence with conditions, or refuses.
A valid application that is still pending is a defence to the offence of having no licence, but it is not a substitute for a licence. Apply as early as you can.
A licence does not give you planning permission. MHCLG guidance encourages councils to confirm that planning permission is in place before issuing a licence, so check with your council's planning team.
How Much Does an HMO Licence Cost and How Long Does it Take?
There is no national fee. GOV.UK says the council sets it, and the law allows councils to fix the fee and take into account the costs of running the licensing regime. Check your council's fee page before you apply.
Councils must decide applications within a reasonable time. Woking Borough Council says its process takes no longer than 8 weeks once an application is validated. That is one council's figure, so ask yours.
A licence lasts up to 5 years, though councils can grant shorter terms: Tower Hamlets Council's mandatory licence, for example, runs for three years. Renew before it expires.
What Is The Fit and Proper Person Test?
Before granting a licence, the council must be satisfied that the proposed licence holder and the manager are fit and proper people. It must consider evidence that the person has:
committed an offence involving fraud or dishonesty, violence or drugs, or a listed sexual offence;
practised unlawful discrimination in business on grounds of sex, colour, race, ethnic or national origins, or disability;
broken housing law or landlord and tenant law; or
failed to follow an approved code of practice.
The council can also consider the conduct of people associated with you, where relevant. Spent convictions are not taken into account, and anyone subject to a banning order is automatically not fit and proper.
The council also reviews management arrangements: the competence of those managing the house, and whether management structures and funding are suitable.
What Conditions Come With an HMO Licence?
The licence sets the maximum number of people and households allowed. Some conditions are mandatory in every licence. GOV.UK lists these:
Send the council an updated gas safety certificate every year.
Install and maintain smoke alarms.
Provide safety certificates for electrical appliances when asked.
MHCLG guidance adds carbon monoxide alarms, furniture safety and a waste disposal condition: you must follow the council's refuse storage scheme, if it has one.
Minimum bedroom sizes (MHCLG guidance, 2018):
6.51 m² for one person over 10
10.22 m² for two people over 10
4.64 m² for one child under 10
A room under 4.64 m² must not be used for sleeping. Councils can set higher standards but not lower ones, and can add conditions on management, use, condition and contents.
If you disagree with a condition, you can appeal to the First-tier Tribunal.
What Are the Penalties for Not Having an HMO Licence?
Fines and Civil Penalties
Letting an HMO that needs a licence without one is a criminal offence, and GOV.UK says you could face an unlimited fine. Allowing more people to live there than the licence permits, or breaking a licence condition, is also an offence.
As an alternative to prosecution, a council can impose a civil penalty. The maximum rose from £30,000 to £40,000 on 01/05/2026. A council cannot both penalise and convict you for the same conduct.
From 01/05/2026, the offence also reaches superior landlords, not only the person managing the property, as amended by the Renters' Rights Act 2025. Defences exist, such as reasonable excuse, but a term in the tenancy agreement does not, on its own, count as a defence for a superior landlord.
Rent Repayment Orders
A rent repayment order (RRO) requires a landlord to repay rent. Tenants or councils can apply to the First-tier Tribunal, which must be satisfied beyond reasonable doubt that the offence took place.
Amount: up to 2 years' rent, including rent paid through Housing Benefit or the Universal Credit housing element
Timing: this applies to offences committed on or after 01/05/2026. Earlier offences follow the old law, and offences spanning that date are split.
Who is liable: an immediate landlord, a superior landlord, or a director or manager of a company landlord.
Repeat offenders: the tribunal must order the maximum where the landlord has previously been convicted of, or penalised for, the same offence, unless exceptional circumstances apply.
Other Consequences
The council must revoke your licence if a banning order is made against you, and it can revoke it if you are no longer fit and proper.
Can You Change, Renew or Vary an HMO Licence?
Renew before the licence expires. Do not wait for it to lapse.
Variation: A council can vary a licence with your agreement, or where circumstances change, including when it learns new information. You or another relevant person can ask for a variation.
Report changes: tell the council if you plan changes to the property, your tenants make changes, or their circumstances change, for example, they have a child.
No transfer: a licence covers one HMO and cannot be transferred, so a new owner must apply.
Temporary exemption: if you tell the council you are taking steps to stop needing a licence, it can issue a 3-month notice. A second notice is possible only in exceptional circumstances.
What Does It Mean for Your Tax?
Rental profit is your income less allowable expenses, and expenses must be wholly and exclusively for the rental business. Repairs are allowable; improvements are capital expenses and cannot be claimed against rental income. Works needed to meet licence standards may fall into either category. HMRC's guidance does not list licence fees, so ask your adviser how to treat yours.
Conclusion
An HMO licence is required in England when five or more people from two or more households share a toilet, bathroom or kitchen. Your council may also require one for smaller HMOs or other private lets under an additional or selective scheme. Check your council's rules first, then apply with your safety certificates ready. Councils set their own fees and decide whether you and your manager are fit and proper. Getting it wrong can mean an unlimited fine, a civil penalty of up to £40,000, or a rent repayment order of up to two years' rent. If you are unsure whether your property needs a licence, ask your council before you let.
