HMO licensing: mandatory and additional
A house in multiple occupation (HMO) is a property shared by people who are not all one household. Some HMOs need a licence automatically; others only need one where the council has brought in an additional scheme.
Mandatory HMO licensing
Mandatory HMO licensing applies across all of England. A property needs a licence if it is let to 5 or more people forming 2 or more households, and those people share a toilet, bathroom or kitchen, with at least one paying rent.
The old requirement that the property be three or more storeys was removed in October 2018, so a two-storey house shared by five people now needs a mandatory licence.
Additional HMO licensing
Additional licensing is a discretionary scheme that extends HMO licensing to smaller HMOs, typically those let to 3 or 4 sharers, and sometimes to certain converted blocks of flats (section 257 HMOs).
It only applies where a council has designated it. Cities including Birmingham, Coventry, Nottingham, Manchester's neighbours and many London boroughs run additional schemes, often borough-wide. Check whether your council runs one before letting a smaller shared house.
Conditions and fees
HMO licences last up to five years and carry conditions: a fit and proper licence holder, annual gas safety checks, electrical safety certificates, working smoke and carbon monoxide alarms, and minimum room sizes and amenity standards.
Fees vary widely by council, commonly £700 to £1,500 or more, often split into two parts. Note that Wales keeps a three-storey test for mandatory HMO licensing, and Scotland's HMO threshold is three or more unrelated occupants.