HMO Licensing Requirements in England 2026 — Mandatory, Selective & Additional

What Is HMO Licensing?

An HMO — House in Multiple Occupation — is a property occupied by three or more people from two or more separate households who share facilities such as a kitchen or bathroom. Licensing is the local authority's primary mechanism for ensuring HMOs meet minimum standards and are managed by a fit and proper person.

Failure to obtain the correct licence is a criminal offence carrying an unlimited fine. Local authorities can also issue rent repayment orders, forcing landlords to repay up to 12 months' rent to tenants or the local authority.

Mandatory HMO Licensing

Since October 2018, mandatory licensing applies to any HMO in England that is occupied by **five or more people** from **two or more separate households**, regardless of the number of storeys. Before 2018, the three-storey rule meant that smaller buildings escaped mandatory licensing — that exemption no longer applies.

To obtain a mandatory licence, landlords must demonstrate:

• The property is suitable for the number of occupants (minimum room size: 6.51 m² for one adult, 10.22 m² for two adults)
• There are adequate communal facilities for the number of occupants
• The landlord (or their agent) is a fit and proper person — no relevant criminal convictions, no previous licence revocations
• The property complies with the authority's management standards

Licences are typically granted for five years and must be renewed before expiry.

Selective Licensing

Selective licensing schemes allow councils to require licences for **all privately rented properties** — not just HMOs — in a designated area. These schemes target areas with low housing demand, high rates of anti-social behaviour, or significant deprivation.

As of 2026, over 60 local authorities operate selective licensing schemes in parts of their area. Notable examples include areas within Liverpool, Nottingham, Salford, Waltham Forest, and Newham. Landlords operating in these areas must hold both a selective licence and, if applicable, an HMO licence.

Selective licensing fees typically range from £350 to £900 per property for a five-year licence.

Additional Licensing

Additional licensing schemes extend HMO licensing requirements to smaller HMOs — typically those occupied by three or four people — that fall below the mandatory licensing threshold. Local authorities can introduce additional licensing without central government approval, and many have done so in university towns and urban areas with high HMO concentrations.

If you own a three- or four-person HMO, always check with your local council whether an additional licensing scheme is in force, as penalties for unlicensed operation apply equally to mandatory and additional licences.

Fit and Proper Person Test

All licence applicants must satisfy the council that they are a fit and proper person to hold a licence. The council will check for:

• Unspent criminal convictions relating to fraud, dishonesty, violence, drugs, or sexual offences
• Previous breaches of landlord or tenancy law
• Previous licence revocations or refusals

Agents named on a licence also need to pass this test. A poor track record with one council can affect applications to others, as authorities increasingly share data.

Penalties for Non-Compliance

Operating an unlicensed HMO is a criminal offence. Local authorities can:

• Impose unlimited fines via prosecution
• Issue civil penalty notices of up to £30,000 per offence
• Issue rent repayment orders requiring refund of up to 12 months' rent
• Apply for an interim management order, taking over management of the property

Use our [HMO calculator](/hmo-calculator) to factor licensing costs and compliance overheads into your return projections.