HMO and landlord licensing in England: the three schemes explained

Scheme 1: mandatory HMO licensing (national)

Anywhere in England, a property let to 5 or more people who form 2 or more separate households is a licensable HMO. “Household” means a family unit — five friends sharing are five households; a couple plus three friends are four. Storeys no longer matter; the headcount test is everything.

This is national law: no council can opt out of it, and it applies whether or not any local scheme exists. The licence comes from the council, lasts up to five years, and carries conditions (room sizes, amenities, management standards).

Scheme 2: additional HMO licensing (council-designated)

Councils can designate additional licensing, which extends HMO licensing to smaller HMOs — typically any property shared by 3 or 4 people forming more than one household. Designations can cover the whole borough or specific wards, and they run for up to five years before needing renewal.

This is the scheme that catches landlords of ordinary shared houses: a three-friend flatshare that needs no licence in one borough is a criminal offence to run unlicensed one street over.

Scheme 3: selective licensing (council-designated)

Selective licensing is broader still: in a designated area, every privately rented property needs a licence — including a single-family let to one household. Councils use it in areas with poor housing conditions or high antisocial behaviour, and designations are often street-by-street.

Selective schemes also expire after a maximum of five years, and councils frequently redesignate with different boundaries — which is why a licence check is never “done once, done forever”.

The penalties for getting it wrong

Letting a licensable property without a licence is one of the most expensively enforced mistakes in the sector:

• •Criminal prosecution with an unlimited fine, or a civil penalty of up to £30,000 per offence
• •Rent repayment orders: tenants (or the council, for benefit payments) can claw back up to 12 months of rent
• •No valid possession under most routes while the property should have been licensed
• •Licence conditions breaches carry their own penalties even once licensed

How to check your property (in the right order)

Answer three questions, in order:

• •1. Headcount: 5+ people from 2+ households? Mandatory licence needed, everywhere in England — full stop
• •2. Shared by 3–4 people from 2+ households? Check whether your council runs additional licensing covering your address
• •3. Any rental at all: check whether your address sits inside a selective licensing designation

Where to check your council

We publish the current licensing position for English councils — schemes, areas and official sources, verified against each council’s own pages — at letclerk.co.uk/landlord-licensing. Enter your postcode there and it takes you to your council’s page.

Because designations change, every LetClerk page shows its last-verified date and links to the council’s official source, and licensing status is re-checked for every property on our subscription.

How LetClerk handles it

We check your exact address against the current designations, prepare the licence application, track its conditions, and diarise the renewal — as part of the £25/month Compliance Managed service. Not sure where you stand? The free compliance score flags licensing questions for your property in 3 minutes, and the £99 audit resolves them with a human on a call.

Common questions

What counts as a “household” for HMO rules?

A family unit: single people, couples, and relatives living together each form one household. Five unrelated friends are five households; a couple plus their two children are one. The household count — not just the headcount — decides whether the mandatory test is met.

My property is a normal single-family let. Can it really need a licence?

Yes — under selective licensing. If a council designates your street, every private rental there needs a licence, even a house let to one family. That is why checking your council’s current schemes matters for every landlord, not just HMO landlords.

How much does an HMO or selective licence cost?

Councils set their own fees — typically several hundred pounds up to £1,500+ per property for a licence lasting up to five years. Fees usually split into an application part and a grant part, and accredited landlords sometimes get discounts.

I didn’t know my area had a scheme. Is that a defence?

No. Licensing offences don’t require the council to have told you personally — designation notices are published, and ignorance is not a “reasonable excuse”. Tribunals do reduce penalties for genuine prompt correction, but the rent repayment exposure remains.

Do licensing schemes expire?

Additional and selective designations last a maximum of five years; councils must re-designate (often with new boundaries) to continue them. Your licence also has its own expiry. Both clocks need diarising — an expired scheme can also mean you no longer need a licence, which is money worth knowing too.