How much does an HMO licence cost and when do I need one?

Full answer

A House in Multiple Occupation (HMO) licence is a legal requirement for many landlords letting shared accommodation, and the cost and precise rules vary depending on both the size of the household and the specific local council's licensing scheme. **When mandatory licensing applies** Mandatory HMO licensing generally applies where a property is occupied by five or more people forming more than one household (broadly, unrelated tenants or separate family units sharing facilities such as a kitchen or bathroom), regardless of the number of storeys the property has -- this is a national minimum standard that applies across England, though local councils can extend licensing requirements further. **Additional and selective licensing schemes** Many local councils also run additional licensing schemes (extending HMO-style licensing requirements to smaller shared properties, such as HMOs with three or four occupants) and selective licensing schemes (covering any private rented property, not just shared housing, in a defined area, often used to tackle poor housing conditions or anti-social behaviour) -- landlords must check with their specific local authority, since requirements vary significantly between council areas. **Typical licence costs** HMO licence fees vary considerably by council, but commonly range from a few hundred pounds up to £1,000 or more for a five-year licence, with some councils charging in stages (an initial fee on application and a further fee once the licence is granted) and others offering discounts for accredited landlords or those using approved management standards. **Worked example** A landlord lets a house to five unrelated sharers in a city with mandatory HMO licensing at a fee of £750 for a five-year licence, worked out at £150 a year. If the same landlord let a similar property in a different council area with additional licensing covering smaller HMOs and a fee of £500 for five years, the annual cost equivalent (£100 a year) would be lower, illustrating how much fees can differ purely based on which local authority area the property sits in. **Licensing conditions and standards** An HMO licence typically comes with conditions covering minimum room sizes, fire safety measures (smoke alarms, fire doors, escape routes), gas and electrical safety checks, adequate kitchen and bathroom facilities relative to the number of occupants, and proper management of the property -- failing to meet these conditions can lead to licence refusal, revocation, or enforcement action. **Penalties for operating without a required licence** Letting a property that requires an HMO licence without having one is a criminal offence, and consequences can include unlimited fines, a Rent Repayment Order (requiring the landlord to repay up to 12 months of rent to the tenants or the local authority), and difficulty obtaining a licence for other properties in future -- tenants can apply for a Rent Repayment Order themselves through the First-tier Tribunal. **Practical tip** Before letting to five or more unrelated occupants (or any shared property in an area with additional or selective licensing), check directly with the relevant local council whether a licence is required and what the current fee and conditions are, since national mandatory HMO rules are only the minimum and local schemes frequently go further.

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