Mandatory HMO licensing

The licensing rule that applies by the numbers, not by council choice — and the one that quietly caught out thousands of smaller shared houses when the storey requirement was dropped in 2018.

What makes HMO licensing 'mandatory' rather than something a council chooses to run?

Mandatory licensing applies automatically, across England, to any property that meets the statutory definition — five or more people forming two or more households sharing some amenities. A council does not decide whether to run mandatory licensing in its area the way it does with additional or selective licensing; if your property meets the threshold, a licence is required regardless of where in England it is.

Did the rules change recently?

Yes. Before 1 October 2018, mandatory licensing only applied to HMOs of three storeys or more. From that date, the storey requirement was removed, so any property with five or more occupiers from two or more households needs a licence regardless of how many storeys it has — bringing many single-storey and two-storey shared houses, and some purpose-built flats, into scope for the first time.

I already had an HMO licence before the 2018 change — do I need a new one?

Not immediately. Licences issued under the old rules generally remain valid until they expire, typically after five years. You need to apply under the current rules only when your existing licence comes up for renewal, or if you did not previously need a licence at all and the 2018 change brought your property into scope.

What happens if I operate an HMO that needs a licence but I don't have one?

Operating an unlicensed HMO that requires a licence is a criminal offence, and the local authority can also impose a civil penalty of up to £30,000 as an alternative to prosecution. A tenant can also apply to the First-tier Tribunal for a rent repayment order against an unlicensed landlord, potentially recovering rent paid during the unlicensed period. On top of that, a landlord who needs but lacks a licence cannot use the Section 21 no-fault eviction route while the property remains unlicensed.

Does mandatory licensing apply to purpose-built blocks of flats?

It can, in a narrower set of circumstances. The 2018 change brought purpose-built flats into scope where there are no more than two flats in the block and at least one of them is occupied by five or more people forming two or more households. Larger purpose-built blocks, and self-contained flats meeting the relevant building standards, are generally treated differently — check your specific property against the current regulations rather than assuming either way.

How is mandatory HMO licensing different from a council's selective licensing scheme?

Mandatory licensing is tied to the physical characteristics of the property — occupancy and household numbers — and applies the same way everywhere in England. Selective licensing is a scheme a council chooses to introduce in a designated area, covering most private rented properties there regardless of HMO status, usually to tackle problems like antisocial behaviour or poor property conditions locally. A property can need both an HMO licence and fall within a selective licensing area, or need only one, or neither.

The test that decides whether you need a licence

A property needs a mandatory HMO licence if it is occupied by five or more people who form two or more separate households, and they share one or more basic amenities such as a kitchen, bathroom or toilet. A household generally means a single person, or people who are related or living as a couple — a group of five friends sharing a house is five separate households for this purpose, while a family of five sharing with one lodger is two households.

Before 1 October 2018, this test also required the property to have three or more storeys. That storey requirement no longer applies in England. A five-person, two- household shared bungalow or a single-storey converted property can therefore need a licence today in exactly the same way a three-storey Victorian house does — the number of people and households is now what matters, not how the building is arranged vertically.

What changed in October 2018, and why it caught landlords out

• 1 Before the change. Mandatory licensing only reached larger, multi-storey HMOs — many smaller shared houses of five or more people fell outside the scheme entirely.
• 2 From 1 October 2018. The storey requirement was removed nationwide in England, bringing single and two-storey HMOs, and some purpose-built flats with no more than two units in the block, into scope for the first time.
• 3 The practical effect. Landlords who had never previously needed an HMO licence, because their property had always fallen just outside the old rules, found themselves needing one without necessarily realising the law had changed.

The consequences of getting this wrong

Operating a licensable HMO without a licence is a criminal offence under the Housing Act 2004, and local authorities can impose a civil penalty of up to £30,000 as an alternative to prosecuting. A tenant in an unlicensed HMO can separately apply to the First-tier Tribunal (Property Chamber) for a rent repayment order, potentially recovering some or all of the rent paid while the property was unlicensed. An unlicensed landlord is also blocked from using a Section 21 notice to regain possession while the licensing failure continues, which can matter a great deal if a landlord needs to recover the property and discovers belatedly that the route is closed to them.

A landlord lets a single-storey bungalow to five unrelated sharers, each with their own tenancy agreement, sharing one kitchen and two bathrooms. The property has never been licensed because, before 2018, its lack of a third storey put it outside mandatory licensing.

5 (unrelated sharers)

Licence required since 1 Oct 2018?

Because the storey requirement no longer applies, this property has needed a mandatory HMO licence since 1 October 2018, regardless of its single-storey layout. If the landlord has never applied, the property has been operating unlicensed for several years, exposing them to a civil penalty of up to £30,000, a possible rent repayment order claim from the tenants, and the loss of the Section 21 route until the position is put right.

HMO — House in Multiple Occupation

Additional licensing

Housing Act 2004, Part 2

Houses in multiple occupation (HMOs)

The Licensing of HMOs (Mandatory Conditions of Licences) (England) Regulations 2018

Mandatory HMO Licensing — Renters' Rights Glossary

What mandatory HMO licensing covers, how the 2018 change removed the storey requirement, and what happens if a licensable HMO is operated without one.