Answers · UK 2025/26
Do I need an HMO licence to rent out my property in the UK?
Yes, if your property is a 'large HMO' -- let to five or more people forming two or more households who share a kitchen, bathroom or toilet -- you must hold a mandatory HMO licence from your local council. Many councils also run additional or selective licensing schemes covering smaller HMOs, so always check locally.
Full answer
A House in Multiple Occupation (HMO) is a property rented to people who are not all from one household and who share facilities such as a kitchen or bathroom. Licensing is run by local councils, and the rules have three layers. Mandatory licensing applies across England to any 'large HMO': occupied by five or more people forming two or more separate households who share an amenity (kitchen, bathroom or toilet). There is no longer a minimum-storeys condition, so a two-storey or even single-storey property can qualify. A licence is required for each such property. Additional licensing is a discretionary scheme a council can introduce to cover smaller HMOs in its area (for example properties with three or four occupants). Selective licensing can require a licence for almost all private rented homes in a designated area, regardless of HMO status. Because these schemes vary by council and change over time, you must check your specific local authority's rules. To get a licence, the property must meet standards on room sizes, fire safety, kitchen and bathroom provision, and the landlord or manager must be a 'fit and proper person'. Licences typically last up to five years and carry a council fee that differs by area, so no national figure applies -- check your council's fee schedule. The consequences of operating an unlicensed HMO are serious: an unlimited fine (or a civil penalty of up to GBP 30,000 per offence imposed by the council), and tenants or the council can apply for a Rent Repayment Order requiring you to repay up to 12 months' rent. HMO income is taxable. Rental profit is added to your other income and taxed at your marginal rate (20%, 40% or 45%), with the GBP 1,000 property allowance available if your gross rents are small. When you eventually sell, Capital Gains Tax applies at 18% or 24% on residential property above the GBP 3,000 annual exempt amount. Note that Scotland, Wales and Northern Ireland have their own HMO regimes.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.