HMO licences: when you need one,
and what happens if you don't have one
In England and Wales you need a mandatory HMO licence if your property is let to 5 or more people who form 2 or more separate households and share a kitchen, bathroom or toilet. Below that threshold you may still need a licence: councils can run additional HMO licensing covering smaller HMOs, and selective licensing covering ordinary lets, so the answer depends on your council and, in many boroughs, on the individual ward.
Facts last reviewed 2026-08-18
Not every licence is an HMO licence
Landlords are caught out because three separate licensing regimes run in parallel, and a property can fall into more than one. Mandatory HMO licensing applies everywhere in England and Wales. Additional HMO licensing and selective licensing only exist where a council has formally designated an area.
| Licence type | Where it applies | Threshold | Set by |
|---|---|---|---|
| Mandatory HMO licence | Nationwide, every council | 5 or more occupiers forming 2 or more households, sharing a kitchen, bathroom or WC | Housing Act 2004, Part 2 (as amended 2018) |
| Additional HMO licence | Only where the council has made a designation | Smaller HMOs, typically 3 or 4 occupiers forming 2 or more households. Thresholds are set locally | Council designation under Housing Act 2004, s.56 |
| Selective licence | Only in designated areas, often specific wards | Almost any privately rented home in the designated area, including a single family or one tenant | Council designation under Housing Act 2004, Part 3 |
Scotland and Northern Ireland run separate HMO licensing regimes with lower thresholds, so the figures above apply to England and Wales only.
The threshold counts people and households, not tenancies
A household is one person, or members of the same family living together, including couples. Five unrelated sharers are five households even on a single joint tenancy. This is where most licensing mistakes start.
| How it's let | Mandatory licence? | Why |
|---|---|---|
| 4 sharers, 4 separate tenancies | Not mandatory | 4 households, below the 5-person threshold. Check for an additional licensing designation. |
| 5 sharers, 1 joint tenancy | Mandatory licence | Unrelated sharers count as separate households regardless of a single joint tenancy. |
| A couple plus 3 friends | Mandatory licence | 5 people, 4 households (the couple counts as one). |
| A family of 6 | Not an HMO | One household. A selective licence may still apply in a designated area. |
| 3 sharers in an additional licensing area | Licence needed | Falls under the council's additional HMO designation, not mandatory licensing. |
There is no national licence fee
Councils set their own fees, and must set them to recover the cost of running the scheme. Fees are usually split: one part paid on application, the balance paid when the licence is granted. Most licences run for five years, so the sticker price is a five-year cost, not an annual one.
The table below shows the published fees for the licensing schemes we track in detail. These are selective licensing fees, which apply to ordinary lets in the designated wards. HMO fees in the same borough are set separately and are usually higher, and often scale with the number of occupiers or storeys. Always confirm against the council's own fee schedule.
| Council | Fee | How it's split | Term | |
|---|---|---|---|---|
| Brent Council | £640 | £340 on application, £300 on grant | 5 years | Brent guide |
| Westminster City Council | £995 | £543 on application, £452 on grant | From 24 Nov 2025 | Westminster guide |
| Harrow Council | £786 | £686 administration + £100 management and enforcement | 5 years | Harrow guide |
| London Borough of Croydon | £800 | £480 on application, £320 on grant | 25 Sep 2026 | Croydon guide |
Fees as published by each council and last reviewed 2026-08-18. See each borough guide for discounts, ward coverage and conditions.
An unlicensed HMO is a criminal offence
Letting a licensable HMO without a licence is an offence under section 72 of the Housing Act 2004. It is a strict liability offence: not knowing a designation existed is not a defence. Councils can choose a civil penalty instead of prosecution, and increasingly do because it is faster.
- Civil penalty of up to £40,000 per offence for operating an unlicensed HMO (raised from £30,000 for offences on or after 1 May 2026), or an unlimited fine on conviction
- A rent repayment order: the tenant, or the council where housing benefit or Universal Credit was paid, can reclaim up to 24 months' rent
- You cannot serve a valid Section 21 notice while the property is unlicensed
- Entry on the database of rogue landlords and agents, and possible banning order for repeat offences
Four checks that settle it
- 1Count the occupiers and the households. Five or more people in two or more households sharing facilities means a mandatory licence, everywhere.
- 2Check for an additional HMO designation in the council's area. If one exists, note the occupier threshold it uses, commonly 3 or more.
- 3Check whether the address sits in a selective licensing ward. Coverage is often ward-by-ward rather than borough-wide, so the neighbouring street can have different rules.
- 4Search the council's public HMO register for the address to see whether a licence already exists, who holds it and when it expires.
Not sure which of the three regimes applies to your property? Our free risk check walks through occupancy, location and paperwork, and tells you where you stand. Run the risk check.
HMO licence questions
Licensing guides for your borough
Find out where you stand
Compliance Shield tracks licensing designations, renewal dates and the evidence councils ask for, so a scheme you'd never heard of doesn't turn into a £40,000 problem.
This page is guidance, not legal advice. Thresholds and penalties reflect the Housing Act 2004 as amended and GOV.UK guidance for England and Wales, accurate to 2026-08-18. The maximum civil penalty for a licensing offence is up to £40,000 for offences on or after 1 May 2026. Licensing designations, fees and conditions are set locally and change: verify your position with your council and take independent professional advice.