HMO licensing
An HMO license is required when renting to three or more tenants from multiple households who share facilities in the UK
In England and Wales, it is mandatory for every large HMO to be licensed. That’s any property where:
There are five or more tenants, who form more than one household
The tenants share toilet, bathroom or kitchen facilities
However, each local authority also has the power to require any HMO – of any size – to be licensed, so you must check with your local authority whether they have any of these ‘additional licensing’ schemes in place.
The licence relates to the property, not the landlord, so you need a separate licence for each HMO that falls under the requirements. A licence is usually valid for a maximum of five years and must be renewed before it runs out.
It’s a criminal offence not to have an HMO licence if one is required and offending landlords can face an unlimited fine.
In addition, tenants can also apply to the First Tier Tribunal for a Rent Repayment Order if their landlord has not obtained a licence, which can result in them being awarded up to 12 months’ worth of rent.
Failure to comply with HMO requirements can therefore be very expensive - landlords letting HMOs are regularly fined for not being licensed, so read our previous article, ‘Landlord fines: How much are the charges and how do you avoid them?’
You can apply for an HMO licence at GOV.UK.
Different rules apply in Scotland and Northern Ireland – see our separate guide on licensing for more information and advice.
Large HMOs – those that are occupied by five or more people from more than one household, who share facilities – must be licensed under national law.
The exception to this rule is large self-contained flats (containing five or more tenants) within a block that has three or more self-contained flats.
Each local authority in England and Wales has the power to extend licensing requirements to smaller HMOs. Additional licensing is entirely at the discretion of the council and can be applied to any area – e.g. an individual ward, a certain street or the entire local authority. As a result, the rules can vary wildly from even one part of a city to another, which can make it very tricky for landlords to know and keep up with their obligations.
So, if you’re planning to let a property as an HMO, it’s essential to contact your council to find out if your property requires a licence and how much it will cost. Even if there isn’t currently a licensing scheme in place, it’s worth getting on their mailing list (if they have one) so you’ll be notified if the situation changes.
You can check your HMO property postcode and find out more about HMO licensing on GOV.UK or speak to a good local agent who should know which streets have which type of licensing.
Under mandatory licensing rules, you must make sure that:
The property’s size and facilities are suitable for the number of occupants
Whoever is managing the house is a ‘fit and proper’ person – and the council will carry out checks to make sure the landlord or agent does not have a criminal conviction, hasn’t breached any landlord laws, etc.
Install and maintain smoke alarms
Send the council a copy of the gas safety certificate every year
Provide the council with safety certificates for all electrical appliances if requested
The council may then add other conditions to your licence, e.g. improving the standard of certain facilities.
Note: If you consider the conditions unreasonable, it may be worth taking legal advice as it is possible to challenge them, and you may be able to get some of the most onerous conditions removed.
Councils may also deploy an inspector to visit your property to make sure it is suitable as an HMO and, if all conditions are satisfied, a licence will be issued.
Be aware that if you fail to obtain a licence where one is required or you breach the conditions of your licence, you could face an unlimited fine in court. Plus, your tenants can apply for a Rent Repayment Order, which can award them up to 12 months’ worth of rent.
Costs vary, as they are set by individual councils. The licence fee is usually payable when you apply and is generally non-refundable, even if the licence is refused.
There is usually a standard fee for a certain number of bedrooms, then a charge for each additional bedroom. Renewals tend to be offered at a reduced rate and there is often a discount for accredited landlords. However, the level of fees and charging structure can vary significantly – for example:
In the East Riding of Yorkshire, the licence fees for a five-bedroom property from April 2023 are £1,016.50 for a new application, £856 for a renewal application and £25 per additional bedroom.
In the Bournemouth, Christchurch and Poole Council area:
Fees are charged in two stages - when the application is made and then after the intention to grant the licence is issued:
New application: £764 (£476 + £288)
Renewal application: £654 (£397 + £257)
Fees are for properties with up to nine households – for those with 10 or more, there is a charge of £16.50 per additional unit
A 20% licence discount is available to accredited landlords
