HMO licensing explained: the three licence types and fines
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The short answer
HMO licensing comes in three forms in England. Mandatory HMO licensing applies everywhere to houses in multiple occupation with five or more people from two or more households. Additional licensing lets a council require licences for smaller HMOs in its area. Selective licensing lets a council require a licence for other privately rented homes, including single-family lets, in a designated area.
Letting without a licence you need is a criminal offence. For offences committed on or after 1 May 2026, the council can impose a civil penalty of up to £40,000, and a tenant can seek a rent repayment order covering up to two years’ rent.
This guide explains HMO licensing for landlords, how to check your council, and what happens if you get it wrong. It is general information for landlords in England, not legal advice.
What counts as an HMO
Government guidance describes an HMO as a property rented out by at least three people who are not from one household, for example a family, but who share facilities like the bathroom and kitchen.
Not every HMO needs a mandatory licence. Whether yours does depends on the number of people, and whether your council runs an additional licensing scheme.
HMO licensing explained: the three types
| Licence type | What it covers | Where it applies |
|---|---|---|
| Mandatory HMO licence | HMOs occupied by 5 or more people forming 2 or more households | Every council in England |
| Additional HMO licence | Other HMOs the council chooses to include, usually smaller ones | Only where the council has designated an area |
| Selective licence | Other privately rented homes, including single households | Only where the council has designated an area |
A property needs only the licence that fits it. A large HMO that needs a mandatory licence does not also need an additional licence.
Mandatory HMO licensing
Since 1 October 2018, mandatory licensing has covered an HMO that is occupied by five or more people from two or more separate households. Government guidance says it can apply to:
- a house or building where more than one household shares basic amenities such as a toilet, washing or cooking facilities
- a flat that meets that test, unless it is a purpose-built flat in a block of three or more self-contained flats
- a converted building where at least one unit is not a self-contained flat
The number of storeys does not matter. A two-storey house shared by five unrelated people can need a licence.
Mandatory licences include national minimum room sizes for sleeping rooms:
| Who sleeps in the room | Minimum floor area |
|---|---|
| One person over 10 years old | 6.51 square metres |
| Two people over 10 years old | 10.22 square metres |
| One child under 10 years old | 4.64 square metres |
A room smaller than 4.64 square metres cannot be used for sleeping. Licences issued since October 2018 must also require you to follow the council’s rubbish storage and disposal scheme, if it has one.
Additional licensing
A council can designate all or part of its area for additional licensing. This brings in HMOs that fall outside mandatory licensing, such as a house shared by three or four people. Each scheme sets out which HMOs it covers, so read the council’s scheme carefully.
Selective licensing
Selective licensing covers privately rented homes that are not HMOs needing a licence, in an area the council designates. It can include a flat let to one family or a couple. Since December 2024, government guidance says councils in England no longer need the Secretary of State’s confirmation before making a selective licensing scheme of any size. More councils may introduce schemes as a result, so check even if you checked a few years ago.
How to check whether your property needs a licence
- Count the people and households. Five or more people from two or more households sharing facilities usually means a mandatory licence.
- Check your council’s schemes. Use our property licensing checker to see the likely council for a postcode and the schemes it runs.
- Confirm on the council’s own map. Schemes often cover certain wards or streets. The council’s map and scheme document are the final word.
- Apply before you let. Applications go to the council, which sets the fee. You can apply yourself or use a managing agent.
- Diary the expiry date. A licence lasts up to five years. Renew before it ends.
A licence also comes with conditions, such as keeping gas safety records and smoke alarms. Our compliance record puts your certificates and due dates on one page.
Penalties for letting without a licence
The penalties tightened for offences committed on or after 1 May 2026.
| Sanction | Who decides | Maximum |
|---|---|---|
| Prosecution | Magistrates’ court | Unlimited fine |
| Civil penalty, as an alternative to prosecution | Council | £40,000 per offence on or after 1 May 2026 (previously £30,000) |
| Rent repayment order | First-tier Tribunal, on a tenant’s or council’s application | Up to 2 years’ rent for offences on or after 1 May 2026 (previously 12 months) |
Government guidance on civil penalties says the maximum rose from £30,000 to £40,000 from 1 May 2026, for offences committed on or after that date. The longer rent repayment period came in through section 103 of the Renters’ Rights Act 2025, also from 1 May 2026, and does not apply to offences committed before that date.
Superior landlords can now be liable
Section 105 of the Renters’ Rights Act 2025 widened the licensing offences from 1 May 2026. If an HMO or house needs a licence and is not licensed, an offence can now be committed by:
- the person having control of or managing it
- the landlord of the occupiers
- any superior landlord, for example the owner in a rent-to-rent arrangement
A superior landlord has a defence if they can prove, for example, that they did not know and had a reasonable excuse for not knowing that the property needed a licence, or that they took all reasonably practicable steps to make sure it was licensed. A term in the tenancy agreement is not enough on its own to give them a defence. Rent repayment orders can also now be made against superior landlords.
The application defence
It is a defence to the offence of having an unlicensed HMO that, at the time, a licence application had been properly made and was still effective. Keep proof of the date you applied.
Worked example: does this house need a licence?
You own a four-bedroom house. On Monday 2 November 2026 you plan to let it room by room.
| Scenario | People and households | Licence needed |
|---|---|---|
| Let to a family of four | 4 people, 1 household | Not an HMO. Check for a selective licensing scheme. |
| Let to three friends | 3 people, 3 households | An HMO, but not mandatory licensing. Check for an additional licensing scheme. |
| Let to a couple and three friends | 5 people, 4 households | A mandatory HMO licence. Check room sizes. |
In the third scenario, each bedroom used by one adult must be at least 6.51 square metres, and the couple’s room at least 10.22 square metres. Apply to the council before Monday 2 November 2026, and keep proof of when you applied.
Common mistakes
- Counting rooms, not people. Mandatory licensing depends on the number of people and households, not bedrooms.
- Forgetting selective licensing. A single-family let can need a licence in a designated area.
- Relying on an old check. Councils can start new schemes. Check again before each new let.
- Letting the licence lapse. A licence lasts up to five years.
- Assuming rent-to-rent protects the owner. Since 1 May 2026, a superior landlord can commit the offence too.
- Overfilling. Letting to more people or households than the licence allows is a separate offence.
Frequently asked questions
Do children count towards the five people?
Yes. The test is five or more persons, and children are counted. A family of three sharing with two unrelated adults is five people in three households.
Can I let the property while my application is pending?
Having a properly made application that is still effective is a defence to the offence of having an unlicensed HMO. Keep proof of the date you applied, and follow any conditions the council sets.
Is the £40,000 maximum per property?
The civil penalty maximum applies per offence. Only one financial penalty can be imposed for the same conduct.
How long does a licence last?
Up to five years. The council may grant a shorter licence.
Do licensing rules apply in Wales?
This guide covers England. Wales has its own rules. See our Wales page.
Next steps
- Check your postcode with the property licensing checker, then confirm on the council’s map.
- Run the free landlord compliance checklist to spot other gaps.
- See landlord safety certificate deadlines for the records a licence usually requires.
If you are facing a licensing investigation or a rent repayment claim, speak to a solicitor; tenants can get advice from Shelter.