HMO licensing in London: who needs one, who doesn't.

HMO licensing trips up more London landlords than almost any other rule, not because it is conceptually hard, but because the answer genuinely depends on where the property is. Two near-identical houses on opposite sides of a borough boundary can have completely different obligations.

This guide explains the three types of licence and how to find out which, if any, applies to you. The golden rule throughout: never assume, always check with the specific local authority.

01 · DefinitionWhat counts as an HMO

A House in Multiple Occupation is, in broad terms, a property let to people who do not form a single household and who share facilities such as a kitchen or bathroom. A "household" means a single person or members of the same family. So three friends sharing a flat are typically an HMO; a couple and their children are not.

Whether an HMO needs a licence is a separate question from whether it is an HMO, and that is where the three schemes come in.

02 · MandatoryMandatory HMO licensing

Mandatory licensing applies across England to larger HMOs. The standard test is a property occupied by five or more people forming two or more separate households, sharing facilities. If that describes your property, you need a mandatory HMO licence, in every borough, with no exceptions.

03 · Local schemesAdditional and selective licensing

Below the mandatory threshold, individual councils can introduce their own schemes:

• Additional licensing extends HMO licensing to smaller HMOs, for example houses shared by three or four people, in areas where the council considers it necessary.
• Selective licensing goes further, requiring a licence for ordinary private rented homes (not just HMOs) within a designated area, regardless of how many people live there.

Both are local, time-limited and area-specific. A borough may run a scheme in some wards and not others, and schemes are renewed, expanded or dropped over time.

04 · GeographyWhy the borough matters more than the property

This is the heart of it. Because additional and selective licensing are set by each council, the borough, and sometimes the exact street, can decide whether a given property needs a licence at all. A three-person house share might need no licence in one borough and a full licence in the next.

There is no shortcut around this. You check the specific local authority's current licensing position for the specific address, every time.

05 · RiskThe cost of getting it wrong

Operating a licensable HMO without a licence is a serious offence. Councils can impose a financial penalty of up to £30,000 as an alternative to prosecution, or prosecute (which can lead to an unlimited fine). On top of that, tenants or the council can apply for a rent repayment order, which can require you to repay rent received during the unlicensed period.

In other words, the downside is not just a fine, it can mean handing back income you have already collected. That is what makes a few minutes of checking so worthwhile.

06 · ActionWhat to do

• Work out whether your property is an HMO at all (households and shared facilities).
• If five or more occupiers in two or more households, assume mandatory licensing applies.
• Check the specific council for additional or selective schemes covering the address.
• Apply before letting, not after, and budget for the licence fee and any required works.
• Re-check at renewal, schemes and boundaries change.

For current scheme details and definitions, start at gov.uk and then go to the relevant borough's own licensing pages, which hold the local detail.