HMO Licensing Requirements 2026: Complete Council Reference

Houses in Multiple Occupation remain one of the highest-risk property types in the private rented sector. The Housing Act 2004 established mandatory licensing for larger HMOs, and subsequent amendments in 2018 extended the mandatory scheme to all properties with five or more occupants forming two or more households, regardless of the number of storeys. With the Renters' Rights Act 2025 receiving Royal Assent on 27 October 2025 and the PRS Database expected to launch in late 2026, councils face both new tools and new obligations when managing HMO licensing. The government's allocation of £18.2 million for PRS enforcement in 2025/26 reflects the scale of the challenge. There are an estimated 500,000 HMOs in England, yet many local authorities suspect significant numbers remain unlicensed. This guide provides a complete reference for council officers responsible for HMO licensing in 2026.

Mandatory HMO licensing under Part 2 of the Housing Act 2004, as amended by the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018, applies to properties that meet all of the following criteria: 1. The property is occupied by five or more persons 2. Those persons form two or more separate households 3. The property is used as their only or main residence 4. At least some element of the accommodation is shared (bathroom, kitchen, or toilet) 5. Rent is payable by at least one occupant Since the 2018 extension removed the "three or more storeys" requirement, all qualifying properties need a mandatory licence regardless of building height. Purpose-built flats in blocks of three or more self-contained units remain exempt from mandatory licensing, though they may fall under additional licensing schemes. Councils cannot charge for the consideration of an application beyond the actual cost of processing. The Supreme Court ruling in R (Gaskin) v Richmond upon Thames LBC [2018] confirmed that licence fees must be split into two parts: the application processing cost and the enforcement/compliance cost, with the second part payable only upon grant.

Local authorities can designate additional HMO licensing schemes under Section 56 of the Housing Act 2004, covering HMOs that fall below the mandatory threshold. A common approach is to licence all HMOs occupied by three or more persons forming two or more households. Any additional licensing scheme requires either Secretary of State approval (for schemes covering more than 20% of the area's geographical extent or PRS stock) or must meet the general approval conditions. Where both additional HMO licensing and selective licensing operate in the same area, councils must be clear about which licence applies to each property. A property that qualifies as an HMO requires an HMO licence, not a selective licence. Double-licensing the same property is not permitted. The Renters' Rights Act 2025 does not change the licensing framework directly, but the forthcoming PRS Database will give councils visibility over landlord registrations that can be cross-referenced against licensing records to identify unlicensed HMOs at scale.

Every HMO licence must include mandatory conditions set out in Schedule 4 of the Housing Act 2004. These include: - Production of annual gas safety certificates to the local authority - Keeping electrical installations in a safe condition, with an EICR carried out at least every five years - Keeping smoke alarms and carbon monoxide alarms in proper working order - Supplying the authority with a written statement of the terms of occupation - Ensuring adequate amenities and space standards Councils may attach additional discretionary conditions. Common additions include requirements for refuse storage, anti-social behaviour management plans, and minimum room sizes. Since October 2018, minimum sleeping room sizes are prescribed nationally: 6.51 square metres for one person and 10.22 square metres for two persons. The fit and proper person test must be applied to both the proposed licence holder and the proposed manager. If either fails, the authority must refuse the licence or require a different licence holder or manager.

Operating an unlicensed HMO that requires a licence is a criminal offence under Section 72 of the Housing Act 2004, carrying an unlimited fine on conviction. Since April 2017, councils have had the alternative of issuing civil penalties of up to £30,000 per offence. Government guidance on civil penalty amounts suggests that councils should develop a scoring matrix considering the severity of the offence, the culpability and track record of the offender, the harm caused or risked, and any financial benefit obtained. Starting amounts typically range from £5,000 for a first-time technical breach to £30,000 for a deliberate and repeated offence. Rent repayment orders under the Housing and Planning Act 2016 provide tenants (and councils for universal credit cases) with a further mechanism: the First-tier Tribunal can order repayment of up to 12 months' rent where a landlord has been convicted of, or issued a civil penalty for, certain housing offences including operating an unlicensed HMO. Councils should note that the Renters' Rights Act 2025 adds the new PRS Database registration offence to the list of offences that can trigger rent repayment orders, creating an additional incentive for landlord compliance once the database goes live.

The PRS Database, expected to launch in late 2026, will require all private landlords in England to register themselves and their properties. For HMO licensing teams, this represents a significant opportunity. Cross-referencing PRS Database registrations against existing licensing records will enable bulk identification of properties that appear to be HMOs but lack a licence. Councils should prepare by ensuring their existing licensing databases are clean, up to date, and structured in a way that supports data matching. Key fields to standardise include UPRN (Unique Property Reference Number), landlord name and contact details, and licence expiry dates. The £18.2 million enforcement funding should be leveraged now to build capacity for data-driven enforcement. Investing in systems that can ingest PRS Database feeds and flag discrepancies will be far more cost-effective than manual inspection-based approaches.