HMO licensing explained: mandatory, additional and selective

Three separate licensing regimes operate in England, they are triggered by completely different things, and a single property can fall under more than one. The confusion this produces is the reason unlicensed letting remains common among landlords who are otherwise careful.

Mandatory HMO licensing

Applies across all of England, with no council discretion. A property needs a mandatory HMO licence if it is occupied by five or more people forming two or more households who share a toilet, bathroom or kitchen facilities.

The storey requirement was removed in 2018. A two-storey house, or a single flat within a larger block, is caught if it meets the five-person two-household test. A great many landlords still believe the old three-storey rule applies, and it does not.

A household means a single person, a couple, or a family. Five unrelated sharers is five households. A couple plus three friends is four.

Additional licensing

A council may designate an area — or its whole district — where smaller HMOs also require a licence. Typically this catches three or four occupiers in two or more households, below the mandatory threshold.

This is discretionary and local. A three-person shared house may need a licence on one side of a borough boundary and not the other, and a designation can be introduced or renewed with a consultation you did not see. This is the scheme most often missed by landlords with property outside the area they live in.

Selective licensing

Different again, and the one whose name misleads. Selective licensing is not about sharing at all — it applies to all privately rented properties in a designated area, including a single family let. It is used by councils to address low housing demand, antisocial behaviour, poor conditions or deprivation.

What it costs to get wrong

An unlimited fine on conviction, or a civil penalty of up to £30,000 as an alternative to prosecution.

A rent repayment order. A tenant — or the council where housing benefit or universal credit was paid — can apply to the First-tier Tribunal for repayment of up to twelve months’ rent. This is the one that changes the arithmetic. On a £1,400 a month property that is £16,800, on top of the penalty, awarded to the tenant.

Possession is blocked. While a property that requires a licence is unlicensed, the routes to possession are restricted. Since Section 21 was abolished, that pressure now falls entirely on Section 8 grounds — and an unlicensed property is a poor place to begin a contested claim.

Checking properly

There is no national register, which is the root of the problem. Each council publishes its own designations and they change. Checking means checking per property, per council, and re-checking when a designation is due to expire or renew.

We built a free tool for exactly this because it is the question we were asked most often — it checks the schemes operating in a given council area so you are not reading five sets of committee minutes to find out whether your three-bed terrace needs a licence.

Beyond the check, the operational answer is to treat a licence like any other dated obligation: it has an expiry, renewal takes time, and a licence that lapses puts you in exactly the position above with no deliberate act on anyone’s part. Tekniti holds licensing alongside the certificates so the renewal surfaces before it becomes a breach rather than after.