Mandatory HMO licensing
Mandatory HMO licensing is the national scheme that requires landlords to obtain an HMO licence from their local housing authority before letting a property to five or more people who form two or more separate households and share facilities such as a kitchen, bathroom, or toilet. The requirement is established under Part 2 of the Housing Act 2004 and applies across England and Wales regardless of the local authority area. A mandatory licence lasts a maximum of five years and cannot be transferred if the property is sold.
The threshold and the 2018 change
Before 1 October 2018, mandatory licensing applied only to HMOs that were three or more storeys high with five or more occupants. The Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 removed the storey requirement entirely. Since that date, any HMO meeting the five-person, two-household test requires a mandatory licence regardless of the number of floors, including single-storey and two-storey properties. This change brought a significant number of smaller properties into mandatory licensing for the first time.
Exemptions
Not every property meeting the occupancy threshold requires a mandatory licence. Schedule 14 of the Housing Act 2004 sets out a number of exemptions, including HMOs managed or controlled by a local housing authority, registered social landlords, police or fire and rescue authorities, or health service bodies. Purpose-built self-contained flats in a block of three or more such flats are also exempt from the national mandatory scheme, though many councils cover these properties under additional HMO licensing schemes instead.
What mandatory licensing does not cover
Mandatory licensing sets the national floor. It does not capture smaller HMOs, typically those with three or four occupants, unless the local council has introduced an additional licensing scheme. It also does not cover single-family lets or non-HMO rentals in areas with selective licensing. A property with four tenants from four households is an HMO but does not require a mandatory licence; whether it requires any licence at all depends entirely on the local authority's schemes.
Penalties for operating without a mandatory licence
Operating a property that requires a mandatory licence without one is a criminal offence under the Housing Act 2004. The consequences include an unlimited fine on conviction, a civil penalty of up to £30,000 imposed by the local authority without prosecution, and eligibility for a rent repayment order of up to 24 months' rent under the Renters' Rights Act 2025 (in force from 1 May 2026). An unlicensed HMO can also trigger mortgage conditions breaches and restrict the landlord's ability to serve valid possession notices.
From working with self-managing landlords across the UK, we find that many landlords are unaware their property crossed into mandatory licensing territory after the 2018 storey threshold was removed. For a full walkthrough of how to apply, what documents are required, and what councils inspect, see our mandatory HMO licensing guide.
Frequently asked questions
Does mandatory HMO licensing apply to flats?
Yes, in most cases. A self-contained flat occupied by five or more people from two or more households requires a mandatory licence. The only exemption is for purpose-built self-contained flats within a block of three or more such flats, but even these are often subject to additional licensing schemes at the local level.
What if my HMO has fewer than five tenants?
Properties with three or four tenants from two or more households are HMOs but fall outside mandatory licensing. You may still need a licence if your local council operates an additional licensing scheme. Always check with your local housing authority before letting.
