HMO licence

An HMO licence is permission from the local council to let a house in multiple occupation, granted on conditions the landlord must meet for the property to be let lawfully. A licence is legally required for any HMO with five or more occupants forming two or more households, and may also be required for smaller HMOs where the council operates an additional licensing scheme. A licence lasts a maximum of five years, applies to one named property and one named licence holder, cannot be transferred when the property is sold, and a separate licence is needed for each licensable property.

When an HMO licence is required

Two routes make a licence compulsory. The first is mandatory HMO licensing under Part 2 of the Housing Act 2004, which applies nationally to every HMO occupied by five or more people in two or more households. The second is additional HMO licensing, a discretionary scheme that brings smaller HMOs, usually those with three or four occupants, into licensing in designated council areas. A property with five or more occupants always needs a licence; one with three or four needs a licence only where the council has adopted additional licensing, so the council for the property's area is the authority to check. Whether a given property is caught is covered in our guide to whether your property is an HMO and needs a licence.

What an HMO licence costs

The fee is set by each council and is not standardised, so it varies widely, commonly from around £500 to £1,900 or more for a five-year licence depending on the area and the size of the property. As a guide, one London council charges £1,387 for a five-bedroom mandatory licence plus £170 for each additional bedroom, while another charges close to £1,900 in total for an additional licence. Many councils split the fee into an application part, paid when applying, and a grant part, paid when the licence is issued, and many offer a discount for members of an accredited landlord scheme. The fee is a deductible business expense, but it is only one cost of a compliant HMO, because meeting the conditions can require works such as fire doors, alarm systems or an additional bathroom.

The conditions an HMO licence imposes

A licence sets conditions the landlord must satisfy at the outset and maintain throughout, and they sit alongside the duties in the Management of Houses in Multiple Occupation (England) Regulations 2006. They commonly cover the maximum number of occupants and households, minimum room sizes, the standard and number of kitchen and bathroom facilities for the number of people, fire safety measures, annual gas safety checks and electrical installation testing, and proper management of the property. A council can refuse a licence where the proposed holder is not a fit and proper person, or where the property cannot reasonably meet the standards. The room sizes a licence enforces are set out in our entry on HMO minimum room sizes.

What happens if an HMO is unlicensed

Letting a licensable HMO without a licence is a serious offence. From 2026 a council can impose a civil penalty of up to £40,000 as an alternative to prosecution, and prosecution can lead to an unlimited fine. A tenant or the council can also apply for a rent repayment order of up to 24 months of rent, and while the property remains unlicensed the landlord's ability to regain possession is restricted. The government's overview of HMO licensing is on gov.uk.

See also: HMO, Mandatory HMO licensing, Additional HMO licensing, HMO minimum room sizes