HMO licence: when you need one and what it costs
Most larger HMOs need a licence from the council, and many smaller ones do too. Here’s how to tell if yours does, what it costs, the minimum room sizes and what happens if you let without one.
Do I need an HMO licence?
In England there are three kinds of licensing:
- Mandatory licensing applies to every HMO let to five or more people forming two or more households. It doesn’t matter how many storeys the building has.
- Additional licensing lets a council extend licensing to smaller HMOs, often three or four sharers, in all or part of its area.
- Selective licensing covers all privately rented homes in a designated area, HMO or not.
The only way to be sure is to check the council’s website for the property’s address, before you buy. Not sure the property is an HMO at all? Start with what is an HMO.
How much does an HMO licence cost?
Each council sets its own fee. Some charge per property, some per bedroom, and many split the fee into an application payment and a second payment when the licence is granted. Fees commonly run from several hundred pounds to well over £1,000. A licence normally lasts up to five years, and councils can grant shorter licences.
Put the licence, the works it requires and the time it takes into your deal figures before you offer. The HMO deal builder has room for conversion and licensing costs.
Minimum room sizes
Licensed HMOs in England must meet national minimum sizes for rooms used for sleeping:
| Occupants | Minimum floor area |
|---|---|
| One person over 10 | 6.51 m² |
| Two people over 10 | 10.22 m² |
| One child under 10 | 4.64 m² |
| Any room under 4.64 m² | Can’t be used for sleeping |
Floor where the ceiling is lower than 1.5 metres doesn’t count. Councils also set amenity standards, such as how many kitchens, bathrooms and toilets are needed per number of tenants, and many ask for more than the national minimums. Get the council’s standards before you plan a layout.
Licence conditions and safety
- Gas safety certificate every year.
- Electrical installation condition report at least every five years.
- Smoke and carbon monoxide alarms, and a fire risk assessment. Larger HMOs usually need fire doors, an interlinked alarm system and a protected escape route.
- Fit and proper person checks on the licence holder and manager.
- Written tenancy terms, waste arrangements and upkeep of shared areas.
Fire safety requirements depend on the size and layout of the property. Many councils follow the LACORS fire safety guidance; talk to the council’s HMO team early on a conversion.
Letting without a licence
Running a licensable HMO without a licence is a criminal offence. Councils can prosecute or impose substantial civil penalties, and tenants can apply for a rent repayment order to recover rent they paid. It can also cause problems with insurance and finance.
Licensing and finance
Lenders on HMO mortgages normally want the licence in place, or applied for, where one is needed. On a conversion, the licence is part of the exit: the refinance usually waits until the works are signed off, the licence is granted and the rooms are let. Allow for that in your bridging term. See bridge-to-let and refurbishment bridging.
Mortgages are handled by a regulated firm. DasLend refers buy-to-let, limited-company, HMO and commercial mortgage enquiries to a firm authorised and regulated by the Financial Conduct Authority, with the permissions to advise on and arrange them. That firm, not DasLend, gives any advice and arranges the mortgage.
Frequently asked questions
Do all HMOs need a licence?
No. Mandatory licensing covers HMOs with five or more people from two or more households. Smaller HMOs need a licence only where the council has additional or selective licensing.
How much is an HMO licence?
Each council sets its own fee. They commonly range from several hundred pounds to over £1,000 per property, and a licence usually lasts up to five years.
What is the minimum bedroom size in an HMO?
6.51 m² for one person over 10, 10.22 m² for two people over 10, and 4.64 m² for a child under 10. Rooms under 4.64 m² cannot be used for sleeping.
What happens if I let an HMO without a licence?
It is a criminal offence. The council can prosecute or impose civil penalties, and tenants can claim back rent through a rent repayment order.
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Related
This guide is general information, not legal, tax or financial advice. Rules differ in Wales, Scotland and Northern Ireland, and councils set their own licensing and planning policies. DasLend is an introducer only: we pass bridging enquiries to specialist lenders, and refer buy-to-let, HMO and commercial mortgage enquiries to a firm authorised and regulated by the Financial Conduct Authority. We do not lend, advise or arrange finance.