The mandatory HMO licensing threshold — 5 or more persons, 2 or more households
Since 1 October 2018, the mandatory licensing threshold under HA 2004 s.55(2) is any HMO occupied by 5 or more persons from 2 or more households. The 3-storey requirement that applied before that date was removed by the Licensing of Houses in Multiple Occupation (Mandatory Conditions) (England) Regulations 2018.
- Occupancy test — 5 or more persons: each individual tenant counts; cohabiting couples form one household but two persons if unrelated to each other
- Household test — 2 or more households: unrelated tenants each form their own single-person household; 5 unrelated tenants = 5 households
- 3-storey requirement removed 1 October 2018: a two-storey or ground-floor HMO with 5+ persons and 2+ households now requires a mandatory licence
- Exemptions are narrow: buildings managed by registered charities; single-flat HMOs in purpose-built blocks under specific conditions — most private landlords will not qualify
Licence application — process, fit and proper person test, fees, and duration
Applications are made to the local housing authority for the area where the property is located. The authority assesses the fitness of the licence holder, the suitability of the property, and the management arrangements.
- Fit and proper person test (HA 2004 s.66): criminal record checks; previous licensing history; compliance history; from 2025, inclusion on the landlord database is checked
- Licence duration: maximum 5 years; local authority sets the fee (typically £500-£1,500; London authorities may charge more)
- Two-part fees are common: application fee (non-refundable) plus a grant fee on licence issuance; some authorities offer discounts for accredited landlords
- Temporary Exemption Notice (TEN): available for up to 3 months while a full application is pending; landlords who intend to apply should request a TEN immediately to avoid operating unlicensed
Mandatory licence conditions — prescribed by the 2018 Regulations
The Licensing of Houses in Multiple Occupation (Mandatory Conditions) (England) Regulations 2018 prescribe conditions that must appear in every mandatory licence. These are non-discretionary and apply to all mandatory licences.
- Annual gas safety check: Gas Safe registered engineer; copy to each tenant within 28 days
- EICR every 5 years (or on change of tenancy): satisfactory report required; copy to local authority within 7 days of request
- Smoke alarm on every habitable storey; CO alarm in any room with a fixed combustion appliance; both in working order at start of each tenancy
- Minimum bedroom sizes: single occupant (10+): 6.51m²; two occupants (10+): 10.22m²; child under 10: 4.64m²; notify local authority within 14 days if a room falls below minimum
Penalties for operating an unlicensed HMO
The consequences of operating an HMO without a mandatory licence or in breach of licence conditions are severe and cumulative — civil penalties, rent repayment orders, and criminal prosecution can all apply to the same breach.
- Civil penalty up to £30,000 per breach (HA 2004 s.72A): per property; multiple unlicensed HMOs = multiple penalties; FTT appeal right
- Rent repayment order: local authority OR tenant can apply to FTT for repayment of up to 12 months' rent; available even after leaving the property (up to 12 months after the offence)
- Criminal prosecution: HA 2004 s.72 offence; unlimited fine on summary conviction; used less frequently than civil penalties but available for persistent non-compliance
- Rent increases unenforceable: a landlord operating an unlicensed HMO cannot serve a valid Section 13 rent increase notice post-RRA 2025; licensing compliance is essential for rent management