Mandatory HMO Licensing Threshold in England: What Landlords Need to Know

What is the mandatory HMO licensing threshold?

A House in Multiple Occupation (HMO) in England requires a mandatory licence if it is occupied by five or more people from two or more separate households who share one or more basic amenities such as a kitchen, bathroom, or toilet.

This threshold is set by the Housing Act 2004 and the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018, which came into force on 1 October 2018. Before that date, mandatory licensing only applied to HMOs of three or more storeys. The 2018 change removed the storey requirement entirely. A five person, two household property on a single floor now requires a mandatory licence, just as a three storey house share does.

Children of any age count towards the number of occupants. A property occupied by a couple, their two children, and one unrelated lodger is five people from two households and would meet the mandatory licensing threshold.

How are households counted?

For the purposes of HMO licensing, a "household" is defined in Section 258 of the Housing Act 2004. Members of the same family living together form a single household. This includes partners (married, civil partners, or cohabiting), parents, grandparents, children, grandchildren, siblings, and step or half-blood relations.

People who are not related to each other are treated as separate households. Three unrelated friends sharing a property constitute three households. A couple sharing with one unrelated person constitutes two households. A family of four renting a property is a single household, regardless of how many people are in it.

The key question is always: how many people, and how many separate households? If the answer is five or more people and two or more households, and they share a kitchen, bathroom, or toilet, the property requires a mandatory licence.

What does the licence require?

A mandatory HMO licence is granted by the local authority for a period of up to five years. The applicant must satisfy the council that they are a "fit and proper person" to hold the licence, which includes checks for unspent criminal convictions, previous licence revocations, and compliance history.

All mandatory HMO licences must include conditions covering gas safety (an annual gas safety certificate must be provided to the council), electrical safety, the installation of smoke and carbon monoxide alarms, and compliance with the council's household waste disposal scheme.

Since October 2018, mandatory licence conditions also include national minimum room sizes for sleeping accommodation. Under the Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018, a room used for sleeping by one person aged over 10 must be at least 6.51 square metres. For two people aged over 10 sharing, the minimum is 10.22 square metres. For one child under 10, the minimum is 4.64 square metres. Any room below 4.64 square metres cannot be used as sleeping accommodation at all. Local authorities can set higher standards than these national minimums.

The licence will also specify the maximum number of occupants permitted in the property. Exceeding this number is a separate offence.

What happens if you operate without a licence?

Operating a licensable HMO without a licence is a criminal offence under Section 72 of the Housing Act 2004. On conviction, the fine is unlimited.

As an alternative to prosecution, local authorities can impose a civil penalty. Since the Renters' Rights Act 2025 came into force, the maximum civil penalty for housing offences under the Housing Act 2004 has increased from £30,000 to £40,000. The GOV.UK civil penalties guidance confirms that operating an unlicensed HMO falls within the "offence" category, meaning the full £40,000 ceiling applies. Each property without a licence can constitute a separate offence, and penalties across a portfolio can accumulate rapidly.

Tenants in an unlicensed HMO can also apply to the First-tier Tribunal for a Rent Repayment Order (RRO), requiring the landlord to repay up to 12 months of rent. Local authorities can make the same application where the tenant was in receipt of housing benefit or Universal Credit. The Renters' Rights Act has doubled the maximum RRO amount to two years of rent and extended liability to superior landlords.

Beyond the financial penalties, an unlicensed HMO can also affect possession proceedings. Courts may refuse to grant a possession order where the landlord has failed to licence a property that requires it.

What about additional and selective licensing?

The mandatory threshold of five persons and two households is a national minimum. Many local authorities in England have introduced additional licensing schemes under Part 2 of the Housing Act 2004, which extend licensing requirements to smaller HMOs that fall below the mandatory threshold. A typical additional licensing scheme covers properties occupied by three or four people from two or more households.

Selective licensing schemes, introduced under Part 3 of the Housing Act 2004, go further still. These require a licence for all privately rented properties in a designated area, regardless of whether the property is an HMO. As of 2026, over 60 local authorities operate selective licensing schemes in parts of their area.

The penalties for operating without a licence under an additional or selective scheme are the same as for mandatory licensing: civil penalties of up to £40,000, unlimited fines on prosecution, and exposure to Rent Repayment Orders.

Landlords should always check with their local authority whether any additional or selective licensing scheme applies to their property. The mandatory national threshold is the floor, not the ceiling.

How to check whether your property needs a licence

The starting point is to count the number of occupants and the number of separate households in the property. If the answer is five or more people from two or more households sharing any basic amenity, the property requires a mandatory licence.

If the numbers fall below that threshold, check whether your local authority operates an additional licensing scheme. Many councils publish an online tool or register that allows landlords to check whether a specific address is within a licensing area.

If you are unsure whether your occupants form separate households, the safest approach is to apply the statutory definition in Section 258 of the Housing Act 2004 and, if any doubt remains, seek advice from the council's private sector housing team or an independent solicitor.

Keeping a clear record of the number of occupants, their household composition, and the property's licensing status is a basic compliance requirement for any HMO landlord.