- Mandatory HMO licensing applies everywhere in England: five or more people, from two or more households, sharing facilities.
- Additional licensing lets councils licence smaller HMOs, such as three or four sharers. Many London boroughs use it.
- Selective licensing covers ordinary single-household lets in designated areas. Since 23 December 2024 councils no longer need government approval to introduce it.
- Letting without a required licence risks civil penalties of up to £40,000 and rent repayment orders of up to 24 months' rent.
Ask three London landlords whether their property needs a licence and you may get three different answers, all correct for their own street. Licensing in England works in layers: one national rule, then two optional schemes that each council can switch on for all or part of its area. Here is how the layers fit together.
Layer one: mandatory HMO licensing
A house in multiple occupation (HMO) is a property let to three or more people who form more than one household and share facilities such as a kitchen or bathroom. A licence is mandatory everywhere in England where an HMO is occupied by five or more people forming two or more households. This applies regardless of the number of storeys, and includes many flats.
Mandatory licences come with conditions: minimum room sizes, fire safety measures, enough kitchen and bathroom facilities for the number of occupiers, and a requirement for the licence holder to be a “fit and proper” person.
Layer two: additional licensing
Councils can extend licensing to smaller HMOs that fall below the mandatory threshold, typically three or four sharers. A large number of London boroughs run additional licensing across all or most of their area, because shared housing is so common in the capital. If you let a three-bedroom flat to three unrelated professionals, this is the scheme most likely to catch you.
Layer three: selective licensing
Selective licensing applies to privately rented homes that are not HMOs: a family let, a couple, a single tenant. Councils designate areas, sometimes individual wards, sometimes most of a borough, where every private rental needs a licence.
The rules changed in late 2024. From 23 December 2024, councils in England no longer need Whitehall approval for selective schemes of any size. Previously, schemes covering more than 20% of a council's area or private rented homes needed the Secretary of State's sign-off. Councils must still consult for at least ten weeks, but more schemes, and larger ones, are expected. A property that did not need a licence two years ago may need one now.
How to check an address
- Count the occupiers and households. This tells you whether HMO rules apply.
- Find the council's current schemes. Each borough publishes its additional and selective licensing designations, usually with a map or postcode checker, and the dates each scheme runs.
- Check the scheme dates. Schemes normally last up to five years, then lapse or are renewed, sometimes with different boundaries.
- Apply before you let. Applying late does not undo the offence for the period the property was unlicensed.
Licence fees vary widely by borough and scheme type, and many councils offer a reduced fee for early applications or accredited landlords.
Licensing is not planning
A licence does not give planning permission. Many London boroughs use Article 4 directions that remove the automatic right to convert a family house into a small HMO. You may need planning permission and a licence, from two different council departments. One does not imply the other.
The cost of getting it wrong
- Civil penalties of up to £40,000 per offence, for offences on or after 1 May 2026 (up from £30,000).
- Rent repayment orders of up to 24 months' rent, payable to tenants or the council.
- Prosecution in serious cases, and a mark against the landlord's fit and proper status for future licences.
- Agents can be liable too where they manage an unlicensed property.
Licensing records will also sit alongside the new national landlord register, which will make unlicensed properties much easier for councils to spot.
How we approach it
Licensing is checked for every property at appraisal, before anything is marketed. Where a licence is needed, we prepare the application, floor plans and supporting documents, and build the licence conditions into the management plan. For guaranteed rent contracts, licensing responsibility is set out in writing from day one, so there is never any doubt about who holds what.
General information for England, not legal advice. Licensing schemes change regularly, so always confirm the current position with the relevant council.