Understanding UK HMO licence requirements

Often called a house share, a house in multiple occupation (HMO) is a rented property that comes with its own set of rules and regulations. If you rent a property or house as an HMO then you need to ensure you’re staying on top of your licensing. 

What is an HMO property?

While HMOs are very specific, there’s a fair amount of variation out there. Many different types of properties can be defined as an HMO. The most obvious is a shared house, but other examples include: 

  • Hostels
  • Lodgings
  • Private residence halls
  • Refuges
  • Buildings with many bedsits and some shared facilities
  • Employee accommodation

These scratch the surface but they all have the same thing in common. Multiple people occupy the same building, typically with shared facilities like kitchens and bathrooms. 

Defining HMO features

In order for something to be officially classed as an HMO it must fulfil four specific criteria:

  1. Occupants must not be from the same household
  2. Occupants must use the property as their main or only residence
  3. The accommodation is used solely for habitation
  4. At least one occupant is paying rent

These characteristics can apply to individual flats, however when we’re considering entire converted blocks, then different standards will apply. Unless a local authority has declared a property as an HMO then all the above requirements must be met for one to be legally classified as one.

Restrictions on HMOs

Your property will only be classed as an HMO if the following apply: 

  • 3 or more tenants live there, forming more than a single household
  • These tenants share facilities

Your property will be classed as a large HMO if there are 5 or more tenants. Remember the government considers a household to be any situation where a single person or members of the same family live together. Families include spouses or live-in partners, relatives like aunts, uncles, and siblings, and step-parents and step-children.

If you own a large HMO, you must meet certain requirements and obligations. You must ensure:

  • You have a licence where required
  • There are enough rubbish bins to manage the HMO’s waste
  • The property is not overcrowded and conforms to England Shelter’s housing standards1 
  • Electrics are managed and checked every 5 years
  • Annual gas safety is carried out
  • Communal areas and shared facilities are in good repair
  • Proper fire safety measurements are in place
  • There are enough bathroom and cooking facilities for everyone

HMO licence requirements

If you’re renting out a sizable HMO in either England or Wales, then you’ll need a licence. Some council areas require this for HMOs where 3 or more people live. Check your local council’s requirements.

A licence will be valid for a maximum of 5 years, at which point you will need to apply for a new one. You will also need an individual licence for each HMO you own. Your local council may impose additional requirements to your licence when you apply, such as improving the condition of your facilities. As soon as you apply, they will let you know.

You may file an appeal with the First-Tier Tribunal if you object to any requirements the council establishes. Although you should apply for the licence personally, a managing agent may do it on your behalf. The cost of the licence will be determined by the council.

You could be fined for renting out a property without the correct licence.

Investing in an HMO

If you’re interested in becoming the landlord of an HMO or purchasing a buy-to-let then get in touch with one of our advisers today. 

Note: There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will meet the cost of the mortgage. Your property may be repossessed if you do not keep up with repayments on your mortgage.

1England Shelter, 2021

Because we play by the book we want to tell you that…

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

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