HMOs
Mandatory HMO licensing: a complete guide for landlords
If you let a property to five or more people who form two or more separate households, you are almost certainly required to hold a mandatory HMO licence. Operating without one exposes you to an unlimited fine, a civil penalty of up to £30,000, and a rent repayment order that could require you to hand back up to two years of rent. Mandatory HMO licensing has been in place since 2006 and was significantly expanded in 2018 when the three-storey requirement was removed, pulling hundreds of thousands of additional properties into scope. This article covers everything a buy-to-let landlord needs to know, including what qualifies as an HMO, which properties require a mandatory licence, how to apply, what the conditions require, and how the rules are changing in 2026. Mandatory HMO licensing is a national scheme that operates separately from selective licensing, see our selective licensing guide.
What is a house in multiple occupation?
A house in multiple occupation (HMO) is a property rented out by at least three people who are not from the same household (for example, not a single family) but who share common facilities such as a kitchen or bathroom. The definition is set out in the Housing Act 2004.
The key concepts are:
Household - A single person, or members of the same family living together. A couple (married, in a civil partnership, or cohabiting) and any children they have with them constitute one household. A landlord and their family sharing a property with tenants is not treated as a single household for HMO purposes.
Shared facilities - The occupants share at least one facility, typically a kitchen, bathroom, or toilet. A purpose-built block of flats where each flat has its own self-contained kitchen and bathroom is generally not an HMO, even if the communal entrance and stairwell are shared.
Privately rented - The property must be used as their only or main residence. Properties used for holiday lets or as business premises are generally excluded.
Understanding whether a property qualifies as an HMO is the first step. Not all HMOs require a mandatory licence, but all licensable HMOs are also HMOs subject to HMO management regulations, which impose separate duties on the property owner.
Which properties require a mandatory HMO licence?
A property requires a mandatory HMO licence if it is occupied by five or more persons who form two or more separate households. This is the national threshold that applies across England and Wales and has no exceptions based on the number of storeys, the type of building, or how long the tenants have lived there.
Before October 2018, the mandatory licensing threshold also required the property to be at least three storeys high. That requirement was removed by the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018, bringing two-storey and single-storey properties with five or more occupants into scope. This change significantly increased the number of properties requiring a licence. If your property doesn't require mandatory HMO licensing it may still be subject to selective licensing in your area.
Counting occupants: the key rules
Children count - Children of any age count towards the total number of occupants for the purpose of mandatory licensing. A property with two adults and three children from different households reaches the five-person threshold.
Households, not bedrooms - The threshold is five or more persons forming two or more households, not five or more bedrooms. A property with five tenants who are all from different households requires a mandatory licence even if some share a room.
Live-in landlords - If a landlord lives in the property as their main home, they and their household do not count towards the occupancy total for mandatory licensing purposes, but the property may still need an additional or selective licence depending on the local scheme.
Purpose-built flats exemption - A flat within a purpose-built block containing three or more self-contained flats is exempt from mandatory HMO licensing even if it has five or more occupants. This exemption applies only to purpose-built blocks, not converted houses.
Converted flats
A building that has been converted into flats but does not meet the Building Regulations standards applicable at the time of conversion (commonly known as a Section 257 HMO) may require licensing under a different set of rules even if the individual flats are self-contained. If the building was converted before 1991 and still does not comply with 1991 Building Regulations, and less than two-thirds of the flats are owner-occupied, the converted block as a whole is treated as an HMO. Check with your local authority if you own a converted flat that you let privately, particularly if the building is a smaller conversion.
Mandatory, additional, and selective licensing: the differences
It is worth being clear about how mandatory licensing fits alongside the other two types of property licensing, because the obligations are separate and can overlap:
Mandatory HMO licensing - Applies nationally to all properties with five or more occupants from two or more households. No local authority decision is needed. If your property meets the definition, you need a licence.
Additional HMO licensing - A local authority scheme that extends licensing to smaller HMOs, typically those with three or four occupants. Over 70 councils operate additional licensing schemes. If your HMO has three or four occupants and your council has an additional licensing scheme, you need a licence under that scheme.
Selective licensing - A local authority scheme requiring all private rented properties in a designated area to be licensed, regardless of size or occupancy. Does not apply to HMOs that already hold a mandatory or additional licence.
For a full explanation of the third type, see our guide to selective licensing for landlords.
How to apply for a mandatory HMO licence
Applications for mandatory HMO licences are made to the local housing authority for the area in which the property is located. Most councils now accept applications online through a property licensing portal, though some smaller authorities still use paper-based processes. You must apply to the council for the borough or district in which each property sits; there is no national application portal.
What you will need to apply
Property details - Full address, number of storeys, number of rooms used as bedrooms, floor areas for each sleeping room (measured in square metres), and total number of occupants.
Fit and proper person declaration - You must confirm that you (and any managing agent) meet the fit and proper person standard. The council will conduct a check against the national database of rogue landlords and may contact other authorities.
Gas Safety Certificate - A current certificate (CP12) from a Gas Safe registered engineer, issued within the last 12 months, for any property with a gas supply.
Electrical Installation Condition Report (EICR) - A valid EICR from a qualified electrician. For HMOs, EICRs must be renewed every five years (not the standard ten years that applies to non-HMOs).
Energy Performance Certificate - A valid EPC for the property.
Floor plan - A plan showing each room, its dimensions, and its designated use. Some councils require this to be drawn to scale.
Fire safety information - Evidence of fire safety measures in place: smoke alarms, heat detectors, fire doors, fire extinguishers, emergency lighting, and any fire risk assessment carried out. Your HMO licence conditions will include detailed fire safety obligations, see our HMO fire safety requirements guide.
Managing agent details - If a managing agent is used, their name, contact details, and any ARLA Propertymark or NRLA accreditation.
Prepare all of these documents before starting the application. Submitting an incomplete application can delay the process considerably, and in the meantime you may still be operating without a valid licence.
The fit and proper person test
Every licence holder must pass a fit and proper person check. The council will consider whether the applicant (or anyone closely associated with them in the management of the property) has been:
Convicted of any offence involving fraud, dishonesty, violence, or drugs
Subject to a banning order under housing legislation
Found to have unlawfully discriminated against tenants on grounds of race, sex, or disability
Found guilty of contravening housing legislation, including previous licence conditions
Subject to a civil penalty under landlord and tenant law
A landlord on the national register of rogue landlords or subject to a banning order will not be granted a mandatory licence. The Renters' Rights Act 2026 makes the register more accessible and connects it more directly to the licence application process.
How much does a mandatory HMO licence cost?
There is no national fee for mandatory HMO licences. Each local authority sets its own fee structure, meaning costs vary significantly across England and Wales. As a general guide:
Typical range - £500 to £2,500 per property for a five-year licence.
Room-based fees - Many councils calculate fees based on the number of bedrooms. For example, a fee of £800 for a five-bedroom property plus £170 for each additional bedroom.
Two-stage payment - Most councils split the fee into an application payment (non-refundable, paid upfront) and a licence payment (paid on grant of the licence). If the application is refused, the application payment is not returned.
Renewal fees - Renewal fees are typically lower than the initial application fee, though this varies by council.
For a large HMO in a London borough, the total fee can exceed £2,000. For a smaller property in a lower-cost area, the fee may be closer to £500. The fee is set at a level intended to cover the council's administration costs; councils cannot make a profit from licensing fees.
Is the HMO licence fee tax-deductible?
Yes. Mandatory HMO licence fees are an allowable business expense and can be deducted from rental income when calculating your taxable profit. They are revenue expenditure because they relate to the ongoing management of your letting business, not to improving the capital value of the property. Keep invoices and payment receipts as evidence. See our full guide to allowable expenses for landlords for more detail on what can and cannot be deducted.
Mandatory HMO licence conditions
Every mandatory HMO licence includes a set of conditions prescribed by national regulations, as well as any additional conditions the local authority decides to impose. Breaching a licence condition is a criminal offence.
Nationally prescribed mandatory conditions
The following conditions must be included in every mandatory HMO licence under the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018:
Gas safety - The licence holder must produce a current Gas Safety Certificate annually and supply a copy to each tenant and to the council on demand.
Electrical safety - The licence holder must ensure that every electrical installation in the HMO is inspected and tested at intervals of no more than five years by a qualified person, and must supply a copy of the most recent electrical condition report to any existing or prospective tenant on request, and to the council within seven days of being asked.
Smoke and heat detectors - The licence holder must ensure that smoke alarms are installed on every floor used as living accommodation, and that a heat detector is installed in every kitchen. All alarms must be kept in proper working order.
Carbon monoxide alarms - A carbon monoxide alarm must be fitted in every room with a solid fuel-burning appliance. For rooms with gas appliances, a CO alarm is strongly recommended and may be required as an additional condition.
Safety certificates for appliances - The licence holder must keep all electrical appliances and furniture supplied in the HMO in a safe condition and produce a declaration of safety when required by the council.
Tenancy terms - The licence holder must provide each occupier with a written statement of the terms on which they occupy the property, and must take references from any new occupier.
Maximum occupancy - The licence must specify the maximum number of occupants permitted. Allowing more people to live in the property than the maximum stated in the licence is a breach.
Common additional conditions
Local authorities regularly attach additional conditions tailored to local standards or the specific property. These often include:
Provision of a fire risk assessment carried out by a competent person
Installation of fire doors to specified rooms
Supply and maintenance of fire extinguishers or fire blankets
Requirements for cycle or bin storage
Attendance at landlord accreditation training or online CPD modules
Providing emergency contact details to tenants
Maintaining communal areas in a clean and safe condition at all times
Minimum room size standards for HMOs
Since October 2018, every mandatory HMO licence must include conditions specifying minimum floor areas for rooms used as sleeping accommodation. These minimums apply nationally and cannot be waived by the local authority.
One adult (over 10 years) - Minimum floor area of 6.51 square metres.
Two adults (over 10 years) - Minimum floor area of 10.22 square metres.
One child (under 10 years) - Minimum floor area of 4.64 square metres.
Room below minimum size - A room measuring less than 4.64 square metres cannot be used as a bedroom at all, regardless of who would occupy it.
There is an important nuance: any part of a room where the ceiling height is less than 1.5 metres cannot be counted towards the floor area calculation. In a loft conversion or attic room with a sloping roof, the unusable area under the eaves is excluded. A room that appears to meet the 6.51 sq m threshold may fall below it once the under-eaves area is discounted.
If the council finds that a bedroom in a licensed HMO is below the minimum size for its occupants, it must impose a condition requiring the landlord to either increase the room size (which may not be possible without planning permission) or reduce the number of occupants in that room. If the room is below 4.64 sq m, the condition must require that the room ceases to be used as a bedroom within 18 months.
Measuring your rooms
Measure the usable floor area of each bedroom before applying. Use a laser distance measurer for accuracy. Discount any area where the ceiling height is below 1.5 metres. If a room falls below the minimum size for its current or intended occupancy, you will need to address this before the licence is issued or accept a condition requiring you to do so within the specified timescale.
Amenity standards for HMOs
Beyond room sizes, HMOs must provide adequate facilities for the number of occupants. Local authorities assess amenity standards when granting a licence and can attach conditions requiring improvements to be made within a stated period.
Kitchens - For every five occupants, there should typically be access to at least one full kitchen with a cooker, a standard-sized fridge, and a sink with hot and cold water. Each occupant should have counter space and storage. Many councils specify minimum measurements: typically 0.2 square metres of worktop and one wall unit of at least 40 cm width per occupant.
Bathrooms and toilets - For up to four occupants, one bathroom with a bath or shower, a wash hand basin, and a toilet is typically the minimum. For five to six occupants, most councils require at least two WCs (one may be a separate toilet) and one bath or shower. Requirements increase as occupancy rises.
Heating - Each room and shared area must have adequate means of space heating. Portable heaters do not satisfy this requirement. A fixed heating system (gas central heating, electric storage heaters, or heat pump) that is accessible to each tenant and capable of maintaining a reasonable temperature is required.
Water supply - Adequate hot and cold water must be available in all kitchens, bathrooms, and en-suite facilities. Hot water must be supplied at a constant temperature through a fixed system.
Refuse and waste - Adequate facilities for storing and disposing of household waste must be provided. This typically means providing sufficient bins or bin bags for each household and ensuring proper access to refuse collection.
Your council will have its own detailed amenity standards document. Obtain a copy before applying and walk through the property against the checklist. If works are needed to bring the property up to standard, it is usually better to complete them before applying rather than accepting a licence with conditions requiring you to do so, as breach of a licence condition is a criminal offence.
Fire safety in HMOs
HMOs present a higher fire risk than single-family dwellings because multiple households are present, escape routes are shared, and tenants may not be aware of the fire safety arrangements in the building. Mandatory licence conditions set a baseline, but compliance with the licence conditions does not exhaust your fire safety obligations.
Fire risk assessment - For HMOs of a certain size or complexity, a written fire risk assessment is best practice and may be an additional licence condition. The assessment should identify hazards, evaluate risks, and set out the measures in place to reduce them.
Smoke alarms - Required on every floor used as living accommodation. Interlinked mains-wired alarms are considered best practice in larger HMOs.
Heat detectors in kitchens - Kitchens must have a heat detector rather than a smoke alarm, as smoke alarms in kitchens generate too many false alarms from cooking.
Fire doors - Fire doors (FD30 or better) between habitable rooms and escape routes are commonly required by councils for larger HMOs, particularly those in converted properties.
Escape routes - Corridors, stairwells, and external doors used as escape routes must be kept clear and accessible at all times. Tenants must be informed of the fire escape plan.
Fire-fighting equipment - Fire extinguishers and/or fire blankets may be required as additional conditions, particularly in properties with communal kitchens.
For the specific rules on smoke alarms, see our guide to smoke alarm regulations in rental properties. For carbon monoxide, see our guide to carbon monoxide alarm requirements for landlords.
How long does a mandatory HMO licence last?
Mandatory HMO licences are granted for up to five years. The council has discretion to grant a shorter licence where there are concerns about the property, the licence holder's history, or where improvement works are required within a specific period.
A licence must be renewed before it expires. There is no automatic renewal: if a licence expires and the property continues to be occupied as an HMO, the landlord is operating without a licence and is immediately in breach of the law. Set a reminder at least three months before expiry to allow time to gather documents and submit the renewal application. Renewal fees are typically lower than initial application fees.
If the property changes materially during the licence period (for example, you increase the number of occupants above the licensed maximum, carry out major works, or a new person takes over management), you should notify the council. Failure to do so can result in a breach of licence conditions.
Penalties for operating an unlicensed HMO
The consequences of letting an HMO without a mandatory licence are severe and have become significantly heavier as a result of the Renters' Rights Act 2026.
Financial penalties under the Renters' Rights Act from 1 May 2026
Civil penalty up to £7,000 - For a first offence, a local authority can impose a civil penalty of up to £7,000 per property as an alternative to prosecution.
Civil penalty up to £40,000 - For a repeat or continuing breach, the civil penalty increases to up to £40,000. This applies to offences committed on or after 1 May 2026. Prior to that date, the maximum civil penalty was £30,000.
Unlimited criminal fine - For the most serious cases, or where a landlord refuses to engage with the civil penalty process, local authorities can pursue criminal prosecution, which carries an unlimited fine and a criminal record.
Banning order - A landlord with a pattern of serious non-compliance can be made subject to a banning order, which is recorded on the national rogue landlord database and prevents them from letting any residential property in England.
Rent repayment orders
This is the penalty that catches many landlords off guard. Where a property has been let without a mandatory licence, tenants have the right to apply to the First-tier Tribunal for a Rent Repayment Order (RRO). If successful, the landlord must repay rent received during the unlicensed period.
Until the Renters' Rights Act comes into force, the maximum RRO is 12 months of rent. From 1 May 2026, the maximum doubles to 24 months. For a five-bedroom HMO generating £3,500 per month in total rent, a 24-month RRO would require the landlord to repay £84,000. This can be claimed by tenants, by former tenants, or by the local authority on behalf of tenants. Both the civil penalty and an RRO can be applied simultaneously: they are separate remedies.
Notice restrictions
A landlord who has not obtained a mandatory licence cannot serve a valid Section 21 notice (notice to quit under the assured shorthold tenancy rules) while the property remains unlicensed. Since fixed-term tenancies and Section 21 are being abolished under the Renters' Rights Act, this is becoming less relevant, but it remains a point of exposure for landlords operating under existing tenancies.
How the Renters' Rights Act 2026 affects HMO landlords
The Renters' Rights Act, coming into force from 1 May 2026, introduces several changes that directly affect HMO landlords beyond the increase in civil penalties described above.
PRS database - All landlords, including HMO landlords, will be required to register on the new Private Rented Sector (PRS) database. This database will be accessible to local authorities and will make it far easier for councils to identify HMOs operating without a mandatory licence. Landlords who are already on the database will be more visible to enforcement teams.
Abolition of fixed-term tenancies and Section 21 - The Act abolishes fixed-term assured shorthold tenancies and the Section 21 'no-fault' eviction route. All residential tenancies will become periodic from the outset. HMO landlords will need to rely on the new grounds for possession, which broadly align with the Housing Act 2004 possession grounds. This makes it more important to keep licences current, as unlicensed HMO landlords lose certain recovery options.
Enhanced enforcement powers - Local authorities will gain enhanced investigatory powers, including easier access to landlords' financial information. This is expected to lead to more proactive enforcement against unlicensed HMOs.
Rent increases - The Act introduces restrictions on rent increases for periodic tenancies, which will affect how HMO landlords manage rent reviews across multiple tenancies within the same property.
For a comprehensive overview, see our post-commencement guide to the Renters' Rights Act and what it means for landlords.
Practical checklist for HMO landlords
Establish whether your property is an HMO: five or more persons from two or more households sharing facilities.
Confirm whether it requires a mandatory licence (five or more occupants from two or more households) or an additional licence from your local council's scheme.
Measure every bedroom and check the floor area against the minimum standards: 6.51 sq m for one adult, 10.22 sq m for two adults, 4.64 sq m for one child. Discount areas under 1.5 m ceiling height.
Gather all required documents: gas safety certificate, EICR (no more than five years old), EPC, fire safety documentation, and floor plans.
Check your council's amenity standards and confirm your property provides adequate kitchens, bathrooms, and heating for the number of occupants.
Submit your application and pay the application fee before the property reaches five occupants, not after.
Once the licence is issued, review every condition and put a system in place for annual gas safety renewals, five-yearly EICR renewals, and fire alarm testing.
Add the licence fee to your annual tax return as an allowable expense.
Diarise the licence expiry date and set a renewal reminder for three months before.
Register on the PRS database when it becomes operational in May 2026.
Frequently asked questions
Do I need a mandatory licence if I live in the property?
If you live in the property as your main home and share it with lodgers or other tenants, the counting rules change depending on the number of people and households involved. As a general rule, if there are five or more people including you forming two or more households, the property may still qualify as an HMO. However, the exemption for resident landlords is narrow. Check with your local authority to confirm whether your specific arrangement falls within the mandatory licensing threshold.
What happens if I buy a property that already has an HMO licence?
An HMO licence is not transferable. It is personal to the licence holder (typically the previous owner). When you buy an HMO, you must apply for a new licence in your own name before continuing to let it as an HMO. Your solicitor should flag this as a pre-completion action. The new licence application can be submitted before completion so that the licence is in place (or under application) from the moment you take over the property.
Can I let an HMO to students?
Yes. Purpose-built student accommodation managed directly by a higher education institution is exempt from mandatory HMO licensing, but a standard buy-to-let property let to five or more students from different households is not exempt. If your student HMO meets the threshold, it needs a mandatory licence in the same way as any other HMO.
What is the difference between an HMO licence and HMO planning permission?
They are separate requirements. Planning permission for use as an HMO may be required where the property is in a designated Article 4 direction area, which removes permitted development rights for the change of use from a single dwelling (Class C3) to a small HMO (Class C4). An HMO licence relates to the management and safety standards of the property; planning permission relates to whether it can lawfully be used as an HMO. You may need both, and they are applied for separately through different departments of the council.
How does mandatory HMO licensing interact with the deposit protection rules?
Tenancy deposit protection obligations apply in the same way to HMO tenancies as to other assured shorthold tenancies. Each tenant's deposit must be protected in a government-approved scheme within 30 days of receipt. Our guide to protecting a tenancy deposit covers the full process.
Can a management company be the licence holder?
Yes. The licence holder does not have to be the property owner. A managing agent or management company can hold the licence, provided they pass the fit and proper person check and meet all the licence conditions. However, the property owner remains jointly responsible for ensuring the licence is in place and conditions are met.
Key takeaways
Mandatory HMO licensing applies to any property occupied by five or more people from two or more separate households, regardless of the number of storeys. This has been the rule since October 2018.
Each property requires its own licence. A portfolio landlord with four qualifying HMOs needs four separate licences and must apply to the relevant local authority for each one.
Minimum bedroom sizes are set nationally: 6.51 sq m for one adult, 10.22 sq m for two adults, 4.64 sq m for one child. Rooms below 4.64 sq m cannot be used as bedrooms at all.
Mandatory licence conditions include annual gas safety certificates, five-yearly EICR inspections (stricter than for non-HMOs), and smoke/heat detectors on every floor.
Fees range from £500 to £2,500+ depending on the council and property size. They are split into two parts and are a tax-deductible revenue expense.
Letting without a licence from 1 May 2026 exposes you to a civil penalty of up to £40,000, an unlimited criminal fine, and a rent repayment order of up to 24 months' rent under the Renters' Rights Act.
The PRS database, launching in May 2026, will significantly improve local authority enforcement capability. Unlicensed HMOs will become much easier to identify.
Apply for your licence before the property reaches five occupants, not after. Gather all documents in advance to avoid delays.
Plan your financials carefully and consider allowable expenses for each property and tenancy.
Mandatory HMO licensing is one of the highest-stakes compliance obligations in the private rented sector. The financial penalties for non-compliance have increased substantially and the regulatory environment in 2026 will make enforcement more systematic. If you have any doubt about whether your property requires a mandatory licence, contact your local authority or an NRLA accredited adviser before continuing to let.
For more on managing your rental compliance obligations, see our landlord compliance calendar and our guide to allowable expenses for landlords.
This article is intended for general informational purposes only and does not constitute legal, financial, or professional advice. Landlord and tenant law is subject to change, and the information in this article reflects the position at the time of writing. You should always seek independent legal or professional advice before taking any action in relation to your property or tenancy.
Author
August Team
The August editorial team lives and breathes rental property. They work closely with a panel of experienced landlords and industry partners across the UK, turning real-world portfolio and tenancy experience into clear, practical guidance for small landlords.
