A House in Multiple Occupation is a property rented to three or more people from two or more separate households who share facilities such as a kitchen or bathroom. The definition sounds straightforward, but the licensing requirements that follow are layered across three different schemes, each operating independently and each with its own threshold, geographic scope, and penalty framework.
Understanding which applies to your property is essential. Operating a licensable HMO without the correct licence is a criminal offence carrying an unlimited fine, and from 1 May 2026, the Renters' Rights Act increased the civil penalty alternative to £40,000 per property.
The three licensing tiers
Mandatory licensing applies nationally to any HMO occupied by five or more people from two or more households sharing facilities. The number of storeys is irrelevant. A ground-floor bungalow shared by five unrelated adults requires a mandatory licence in the same way a three-storey house does.
This rule has applied since October 2018, but it continues to catch landlords who assume their property is exempt because it is not a traditional multi-storey house share.
Additional licensing is a discretionary scheme that local councils can introduce to extend licensing requirements to smaller HMOs, typically those with three or four occupants, that fall below the mandatory threshold.
Approximately 68% of councils in England now operate additional licensing schemes. New schemes continue to be introduced, meaning landlords who check their licensing position once and assume it remains unchanged may be exposed to unnecessary risk.
Council schemes change, and the landlord's responsibility is to know what applies to their specific property at the current time.
Selective licensing applies to all privately rented properties in a designated area, regardless of whether they are HMOs. A single-occupancy buy-to-let property in a selective licensing zone requires a licence in the same way a shared house does.
Over 60 local authorities operate selective licensing schemes in parts of their area. A landlord who holds an HMO licence for a property in a selective licensing zone may also need a separate selective licence.
What the licence requires
To obtain an HMO licence, the property must meet minimum room size standards, currently 6.51 square metres for a single adult bedroom, 10.22 square metres for two adults sharing, and 4.64 square metres for a child under ten.
Adequate fire safety provisions are required, including smoke alarms, fire doors where appropriate, and unobstructed escape routes. The Gas Safety Certificate, EICR, and EPC must all be current and available at application.
The landlord or managing agent must demonstrate they are a fit and proper person, with no relevant criminal convictions or previous licence revocations.
Licence fees are set by individual councils and are not nationally standardised. As a guide, a five-year mandatory HMO licence typically costs between £700 and £900 on average nationally, although costs vary significantly by location. Each HMO requires a separate licence.
The penalty for getting it wrong
Operating an unlicensed HMO exposes a landlord to an unlimited fine on conviction in the magistrates' court. Local authorities can alternatively issue civil penalties of up to £40,000 per property from 1 May 2026.
Tenants living in an unlicensed HMO can apply to the First-tier Tribunal for a Rent Repayment Order covering up to 24 months' rent for offences committed from 1 May 2026 onwards.
A landlord's record of unlicensed operation may also affect future licence applications and fit and proper person assessments.
The first step is to check your council's website for current mandatory, additional, and selective licensing schemes that apply to your specific property location.
Talk to our lettings team about HMO compliance today