A House in Multiple Occupation (HMO) is a specific legal category of rented property under the Housing Act 2004. Whether your property is an HMO determines whether mandatory or additional licensing applies, which management regulations govern you, and whether you need planning permission. Misidentifying an HMO is a common and costly mistake.
The standard HMO test
Under Section 254 of the Housing Act 2004, a property is an HMO if it meets the standard test. The standard test applies to most residential properties and requires all of the following:
- The property is occupied by at least 3 people
- Those people form at least 2 separate households
- At least one basic facility is shared (kitchen, bathroom, or toilet)
- The property is the tenant's only or main residence
- Rent is paid in money or money's worth
What is a 'household'?
A 'household' under the Housing Act 2004 is either a single person or members of the same family living together. Family includes spouses, civil partners, cohabitees, parents, grandparents, children, grandchildren, siblings, uncles, aunts, nephews, nieces, and first cousins, whether by blood, marriage, or civil partnership.
- Single household: A couple and their child, 3 people, 1 household, NOT an HMO
- Two households: A couple sharing with a friend, 3 people, 2 households, IS an HMO
- Three households: Three unrelated adults sharing, 3 people, 3 households, IS an HMO
Mandatory HMO licensing threshold
- Mandatory licensing applies nationally (no local authority designation required) to HMOs with 5 or more people from 2 or more households
- The previous 3-storey requirement was removed in October 2018, storey count is no longer relevant
- Operating a licensable HMO without a licence is a criminal offence: unlimited fine and/or civil penalty up to £30,000
Additional HMO licensing
Local authorities can extend licensing to smaller HMOs below the mandatory threshold. Additional licensing schemes commonly cover HMOs with 3 or 4 occupants, specific property types, or specific localities. Check your local council's website for current designations.
HMO Management Regulations
All HMOs, licensed or not, are subject to the Management of Houses in Multiple Occupation (England) Regulations 2006. These require the HMO manager to maintain structural condition, means of escape from fire, EICR (every 5 years), annual gas safety checks, water supply and drainage, and communal areas.
Planning use class, C3 vs C4
HMOs with 3–6 unrelated occupants fall into planning use class C4 (C3 is a standard family home). In most areas, converting C3 to C4 is permitted development. However, many councils have applied Article 4 Directions removing this right, always check local planning rules before converting a single-let property to an HMO.