What are the Different Types of HMO License?

Landlords Property Market

Posted in Nov 18 , 2024

What are the Different Types of HMO License?

London’s rental market is a complex and competitive space where houses in multiple occupations (HMOs) are key to providing affordable housing for students, professionals, and others. An HMO is a property rented out by at least three people from different households who share facilities like bathrooms or kitchens. To ensure HMOs meet safety and quality standards, the UK requires landlords to obtain specific licence depending on the property type and location. This blog explores the types of HMO licences available, the legal requirements, and why they matter for London landlords.

What is an HMO?

An HMO, or House in Multiple Occupations, is defined by UK law as a rental property shared by multiple tenants who are not part of the same household and share essential facilities such as bathrooms or kitchens. HMOs are particularly common in London, where affordable housing options are limited, and demand for shared accommodation is high. According to a report by the Greater London Authority, HMOs make up a significant part of the rental housing market in the capital, offering accessible options for tenants who need flexible or lower-cost housing arrangements.

Types of HMO Licences

In the UK, there are three primary types of HMO licences: Mandatory HMO License, Additional HMO License, and Selective Licensing. Each type has distinct requirements, and London landlords should understand which applies to their properties.

1. Mandatory HMO Licence

A Mandatory HMO License is required for properties that meet the following criteria:

The property is occupied by five or more tenants who form more than one household.
The tenants share facilities, such as bathrooms or kitchens.

This licence is required by law across England and Wales, regardless of location. London’s dense population and high demand for shared housing mean many properties fall under this category, especially in popular rental areas. To qualify, landlords must meet minimum room sizes, fire safety standards, and other health and safety requirements.

Room Size Standards (as per 2018 HMO regulations):

Rooms used for sleeping by one adult must be at least 6.51 square metres.
Rooms shared by two adults must be at least 10.22 square metres.
Rooms used by children under 10 must be at least 4.64 square metres.

Failing to secure a mandatory licence can lead to hefty fines of up to £30,000 or even criminal charges, underscoring the importance of compliance.

2. Additional HMO Licence

An Additional HMO License may be required by local councils for properties that fall outside the mandatory criteria but are still considered HMOs. Typically, additional licensing applies to:

Smaller HMOs that accommodate three or four tenants from different households sharing facilities.
Properties in areas with high rental demands or concerns over housing standards.

Local councils use this licence to improve rental housing quality, especially in areas with significant HMO populations. In London, boroughs such as Camden, Hackney, and Newham have additional licensing schemes due to high demand and the need to regulate housing standards. Licensing requirements for additional HMOs are often similar to those for mandatory licences, including room sizes, fire safety, and waste disposal provisions.

Example of Additional Licensing Requirement: Camden Borough Council requires an additional HMO licence for properties rented by three or more people from two or more households, a standard used to maintain safe and comfortable housing for tenants.

3. Selective Licensing

Selective Licensing applies to all privately rented properties within specific areas, not just HMOs. This licence is typically used when the local council identifies issues related to low housing standards, poor property conditions, or antisocial behaviour. London boroughs with selective licensing schemes include Croydon, Barking, Dagenham, and Brent.

Selective licensing does not specifically target HMOs but aims to improve overall housing quality within the designated areas. Unlike mandatory and additional licences, selective licensing covers all rental properties, whether they are HMOs or not. This requirement helps councils enforce property standards and ensure landlords maintain their properties responsibly.

Exemptions to HMO Licensing

Not all properties need an HMO licence. Properties managed directly by the local authority, housing associations, or specific charities may be exempt. However, landlords should confirm exemptions with their local council to avoid penalties for non-compliance.

How to Apply for an HMO License in London

Applying for an HMO licence generally involves the following steps:

Complete the Application Form: Each London borough council has its application form, which can be accessed online or through their housing department.
Provide Necessary Documentation: This may include safety certificates (gas and electrical), proof of room sizes, tenancy agreements, and fire safety compliance.
Pay the Licensing Fee: Licensing fees vary by borough and may range from £500 to £1,000 or more, depending on the licence type and the property’s size.
Undergo Property Inspections: The council may inspect the property to ensure it meets all safety, hygiene, and legal requirements.

Legal Requirements and Compliance

Operating an HMO without the correct licence can result in serious penalties, including fines of up to £30,000 or prosecution. To maintain compliance, landlords must meet the following standards:

Health and Safety: Landlords must install smoke alarms, provide annual gas safety checks, and ensure the property has proper electrical safety certificates.
Room Size and Overcrowding: Room sizes must adhere to the minimum requirements set by the HMO regulations.
Waste Disposal: Adequate waste disposal and recycling facilities must be provided to tenants.

In addition to these standards, local councils may impose further requirements, such as restrictions on the number of occupants per room. London landlords should regularly check with their borough council for changes to HMO regulations, as councils frequently update rules to address local housing needs.

How Can Cribs Estates Help?

At Cribs Estates, we offer comprehensive support to landlords navigating the complexities of HMO licensing. Our team is here to assist, from helping you understand the licensing process to ensuring your property meets all legal standards. Contact Cribs Estates today to learn how we can help you secure the right HMO licence and confidently manage your property in compliance with London’s latest regulations.

Shared on social media

Comments

Enquiry form

Latest Blogs

Block Managing Agents: Do You Really Need One?

If you recently owned or started managing your small building with a few flats, it’s easy to think you can handle everything yourself. On paper, it will not look complicated.But this is exactly where most landlords get it wrong.Managing a building with multiple flats is not just about collecting payments or arranging the odd repair. It involves legal responsibility, financial management, and dealing with people, all at the same time.That’s why many owners eventually start looking for managing agents for small blocks of flats or professional block managing agents.The real question is not if you can manage it? It’s about spending the time that is worth spending on building a portfolio.Small Blocks Are Not as Simple as They LookWe hear a common assumption from our clients in the beginning: It's only 3-5 flats, how hard can it be to manage them? In reality, small blocks can be more challenging than large ones. Why? Because everything is shared:Communal areasMaintenance costsResponsibilities between leaseholdersEven something simple like fixing a hallway light can turn into a discussion about cost, responsibility, and timing.What Happens When You Try to Manage It YourselfMost landlords begin to self-manage, which initially seems manageable. Then things start to stack up, and you find yourself: Chasing service charge paymentsOrganising repairs between multiple ownersDealing with complaints or disagreementsTrying to understand lease termsHandling paperwork and complianceIt quickly stops being a side task and becomes something that needs constant attention. And another issue that arises is the dependency of everything on you. The Legal Side Most Owners UnderestimateThis is where things get serious. When you’re responsible for a block, you are not just organising tasks; you are legally accountable. This can include:Ensuring building insurance is in placeMaintaining safe communal areasFollowing fire safety guidanceMeeting leasehold obligationsMany owners don’t realise how much responsibility sits with them until something goes wrong. And when it does, it can quickly become expensive.Where Problems Usually StartService charges seem straightforward: collect money and pay for maintenance. But in practice, this is one of the biggest pressure points. Common issues include:Leaseholders not paying on timeDisagreements over what is “fair”Unclear budgetingLack of transparencyEven one unpaid contribution can create tension across the entire block. And if things aren’t handled properly, it can damage relationships between residents and affect the building overall.Repairs and Maintenance Are ExpensiveWith a single property, you make decisions quickly. In a block of flats, it’s different. Questions start to come up:Who approves the work?Which contractor should be used?How is the cost shared?What if someone disagrees?Delays are common, and small issues can become bigger problems if not handled early. This is where many landlords realise that managing a block is not just about fixing things, it’s about coordinating people.Disputes Between LeaseholdersThis is rarely talked about, but it’s one of the biggest challenges. You may have to deal with:Noise complaintsDisagreements over costsMaintenance responsibilitiesCommunication breakdownsAs the person managing the building, you often become the middle point. And without experience, these situations can become stressful very quickly.What Block Managing Agents Actually DoThis is where block managing agents step in. Not as a luxury, but as a structured way to manage everything properly. A good managing agent will:Collect and manage service chargesHandle maintenance and contractor coordinationEnsure compliance with legal requirementsCommunicate with all leaseholdersKeep records organised and transparentCost vs Risk: Is It Worth Doing It Yourself?This is the decision most landlords eventually face. Yes, hiring managing agents for small blocks of flats comes with a cost.But compare that with:Time spent managing issuesRisk of legal mistakesDisputes between residentsDelayed maintenanceFinancial mismanagementIn many cases, the cost of getting it wrong is higher than the cost of getting it managed properly.Stay in Control with Cribs EstatesCribs Estates work with landlords and freeholders who want their block to run smoothly, without the constant back-and-forth. Our team assists you in structuring service charges collection and tracking, coordinates repairs and maintenance on time, keeps the communication clear between all parties, and ensures compliance requirements are met. The goal is to remove the stress that comes with it. Speak today to discuss your project.

HMO Landlord Responsibilities: What Most Landlords Overlook

If you’re among those landlords who are renting out a shared property, then you must know about the HMO landlord responsibilities. Like many landlords who move into HMOs thinking it will increase their rental income without doing much from their side, you may get a surprise when you find out it’s not true. In reality, the rules become strict, risks are high, and there is more day-to-day management stress. The problem comes when many landlords don’t know what they are actually required to do until they get a notice.When Does a Property Become an HMO?A property is classed as an HMO (House in Multiple Occupation) if:At least three tenants live thereThey form more than one householdThey share facilities like a kitchen or bathroomThis means you don’t need a large property to fall under HMO rules. Even a small house with three unrelated tenants qualifies.Many landlords become HMO operators without realising it, and later face issues. HMO is Not a Standard RentalYes, it is a regulated setup that landlords have to deal with. Local councils treat HMOs differently because sometimes tenants can pose safety risks. With shared living, the number of wear and disputes increases, and poor management can affect neighbours and communities.So your role changes from simply renting a property to actively managing a multi-tenant environment.Where Most Landlords Get It WrongNormally, landlords get confused here because the rules vary with borough, and what applies to one area will be different in another. There are three main types of HMO:A mandatory licence is for properties with 5 or more tenantsAdditional licensing is set by local councils for smaller HMOsSelective licensing applies to all rentals in certain areasIf you get this wrong, the consequences are serious:Fines of up to £30,000Rent repayment ordersRestrictions on renting your propertySafety Responsibilities You Cannot IgnoreHMO safety standards are stricter than those of standard rental properties. You are responsible for ensuring:Fire doors are installed where requiredSmoke alarms are fitted and workingEscape routes are clear and accessibleGas safety certificates are updated annuallyElectrical checks (EICR) are carried out every five yearsAnd you need to remember that these are not practices to consider, but legal requirements. Failure to meet these standards can lead to enforcement action or even criminal penalties.The Challenges of Managing Multiple TenantsWith more tenants, you get more income, but many landlords forget that it brings its own challenges as well. You will have to handle the disputes between housemates, share the responsibility issues, handle noise complaints, and deal with higher turnover. Unlike a single tenancy, you’re managing multiple relationships at once. So you will need to work double time to work it all out. Rent Collection in HMOs is a Big AskThe majority of landlords who are working with Cribs Estates were facing challenges with rent collection. Why? Because if you’re starting an HMO, you will deal with multiple tenants paying separately, some would ask for a couple of more days, some would pay upfront, whilst you would have to keep on following up with some. Moreover, the payment dates will be different for each, so you will have to manage them all, and also keep a check on which payments have already been received and which are still pending. All of these tasks require time, lots of it! This is why many landlords move towards reliable rent collection services like Cribs Estatesas part of their HMO management.Maintenance and Property StandardsHMOs experience more wear and tear than standard properties.More tenants mean:Faster deterioration of shared spacesMore frequent repairsHigher expectations for cleanliness and upkeepRegular inspections become necessary in such cases to maintain standards and avoid complaints. Ignoring maintenance will only increase the risk of council intervention.Read More: Stamp Duty Changes 2026The Real Risk: Fines, Claims, and Legal ActionOftentimes, landlords don’t consider this until it’s too late. Failing to meet HMO landlord responsibilities can result in:Civil penalties of up to £30,000Rent repayment orders (returning rent to tenants)Difficulty regaining possession of the propertyLegal disputes and reputational damageEven small compliance mistakes can escalate quickly. This is why HMOs are often seen as higher-risk, higher responsibility investments.We Help You Stay in ControlManaging an HMO successfully is about keeping everything running properly, legally, and consistently. At Cribs Estates, we help landlords reduce risk and simplify the process by handling the areas that matter most:Licensing guidance to ensure your property meets local council requirementsTenant management to handle communication and reduce disputesStructured rent collection so payments are tracked, consistent, and reliableMaintenance coordination to keep the property in good conditionCompliance checks to ensure all safety and legal obligations are metThe goal is simple to protect your property, your income, and your time. Get the right support early and save yourself time, money, and stress.Read More: Estate Agents in Richmond

Renters’ Rights Bill and Landlord Repossession Surge: What It Means for You

If you’ve been following the news around the renters’ rights bill landlords' repossession surge, you’ve probably noticed that more landlords are acting now rather than waiting.This isn’t random. It’s a reaction. Across the UK, landlords are moving to regain control of their properties before the new rules take effect. With Section 21 set to be abolished from May 2026, the way landlords handle repossession is shifting completely.The question is not just what the law says. The real question is: What does this mean for you as a landlord right now?Why Landlords Are Repossessing Properties NowRecent figures show that landlord repossessions have already started rising, even before the law fully changes. Some reports suggest increases of around 3% to over 6% year-on-year, depending on the dataset.What’s interesting is that this rise is happening even as some possession claims have fallen. That tells you something important: Landlords are being more selective and more strategic.Many are choosing to act now because once the new rules fully apply, regaining possession of a property will become challenging, as it will depend on legal processes.What the Renters’ Rights Bill Actually ChangesThe biggest change in the renters’ rights bill is this: Section 21 “no-fault eviction” is being removed. This means landlords will no longer be able to ask tenants to leave without giving a legal reason.Instead, all repossessions will need to go through Section 8 grounds, which require justification such as:Rent arrearsBreach of tenancyLandlord selling the propertyLandlord moving back inOn paper, this sounds fair, but it changes how much control landlords have over their property.Why This Is Causing a Repossession SurgeWhy renters’ rights bill landlords repossession surge are being searched more is because landlords are making decisions now, considering:Section 21 is still available (for a limited time)Future eviction routes will take longerCourt involvement will increaseUncertainty around timelines is growingThe Bigger Concern: Control and TimeThe real issue for most landlords is not eviction itself. It’s a loss of control.Under the new system:You must prove legal groundsTenants can challenge an evictionCourt processes become essentialTimelines become less predictableThis shifts the process from a landlord-led decision to a court-led process, which brings attention to another concern. The Court System and DelaysOne of the biggest gaps in most discussions is the role of the courts. Even now, landlords experience delays when dealing with possession claims. With the renters’ rights bill fully implemented, experts expect:More contested casesLonger waiting timesIncreased pressure on courtsRecent data already shows that repossession timelines have increased, with cases taking weeks longer than before.For landlords, this means mistakes in tenant selection or management could take much longer to resolve.Should You Be Worried About the Repossession Surge?The answer depends on how your property is managed. The repossession surge is not just about risk; it’s also about awareness. Landlords can operate successfully if they:Choose the right tenantsKeep proper documentationStay compliantHowever, landlords who rely on informal processes or delayed action may find the new system much harder to manage.Cribs Estates Helps You Stay ProtectedUnder the new system shaped by the renters’ rights bill landlords repossession surge, the focus is no longer just on finding tenants; it’s about managing risk from the start.At Cribs Estates, we focus on what actually matters:Stronger tenant selectionWe carry out thorough referencing and affordability checks to reduce the risk of future arrears or disputes.Structured rent collectionConsistent rent collection systems reduce the chances of missed payments and create a clear financial record if issues arise.Compliance and documentationFrom tenancy agreements to safety requirements, everything is handled properly so landlords are protected if legal action is ever needed.Ongoing property managementWe manage communication, inspections, and maintenance, ensuring problems are identified early rather than becoming bigger issues later.Clear guidance on legal changesAs rules evolve, we help landlords understand what applies to them and what actions to take.Landlords who adapt early, put the right systems in place, and manage their properties professionally will continue to perform well.Stay ahead of these changes and keep your property running smoothly.

House Purchase Tax UK: What You’ll Actually Pay

Many buyers go in property purchase thinking they know what they have to pay, then are hit by a surprise house purchase tax UK cost. That’s because stamp duty (SDLT) isn’t as simple as it looks. It depends on your situation, not just the property price.Let’s break it down properly so you know exactly what to expect and where most people get it wrong.Where Buyers Get WrongThe most common mistake is thinking stamp duty is a flat percentage. It’s not.In the UK, house purchase tax (stamp duty) works on a tiered system. You pay different rates for different portions of the price. For example:If you buy a property for £295,000, you don’t pay 5% on the full amount.You pay:0% on the first £125,0002% on the next £125,0005% on the remaining amountThat’s how you end up with around £4,750, not £14,750.Current House Purchase Tax Rates in the UK (2026)As of 2026, the standard stamp duty rates are:0% on the first £125,0002% from £125,001 to £250,0005% from £250,001 to £925,00010% from £925,001 to £1.5 million12% above £1.5 millionThese thresholds changed after April 2025, which is why many buyers are still working with outdated figures.What You’ll Actually PayLet’s read some example scenarios to better understand the calculations: Example 1: Standard Buyer (£400,000)0% on £125,000 = £02% on £125,000 = £2,5005% on £150,000 = £7,500The total house purchase tax: £10,000Example 2: First-Time Buyer (£500,000)0% up to £300,0005% on the remaining £200,000The total house purchase tax: £10,000If this same buyer weren’t eligible for relief, they would pay more, which is why eligibility is required.Example 3: Buy-to-Let Property (£300,000)For landlords, an additional 5% surcharge applies.Standard tax: £5,000Surcharge: £15,000The total house purchase tax: £20,000You see, it’s the same property, but slight changes can give a completely different outcome.When You End Up Paying More Than ExpectedYou may pay a higher house purchase tax UK if:You already own another propertyYou haven’t sold your current home yetYou’re buying jointly with someone who owns propertyYou own even a small share in another propertyEven owning property abroad or inheriting a share can affect your stamp duty.This is why two buyers purchasing the same home can pay completely different tax amounts.First-Time Buyer Relief: Are You Eligible?First-time buyer relief can save you a big amount, but many people assume they qualify when they don’t. You get:0% on the first £300,000Reduced rates up to £500,000But only if:You have never owned property anywhere in the worldYou are buying as your main residenceIf you’ve inherited property, owned abroad, or are buying with someone who owns property, you may lose this relief. That’s where many buyers miscalculate their property tax in the UK.Additional Property Tax for LandlordsFor landlords, stamp duty on additional properties increases the cost. You are paying an extra 5% on top of standard rates, applied to the full purchase price.This is why buy-to-let investors often see tax bills of £15,000-£30,000+, depending on the property value.For example:A £400,000 investment property means the tax can exceed £30,000Latest Updates You Should Know (2025-2026)The house purchase tax UK system has become stricter in recent years. Planning is the key now, considering these updates:Stamp duty thresholds reset after April 2025Additional property surcharge remains at 5%Non-UK residents pay an extra 2% surchargeGreater scrutiny on ownership and eligibilityHidden Costs Buyers Often IgnoreStamp duty is just one part of the cost. Buyers also need to budget for:Solicitor feesSurvey costsMortgage arrangement feesMoving expensesMany buyers focus only on the property price and forget that the total purchase cost can be significantly higher.How to Reduce House Purchase Tax (Legally)There is no shortcut, but there are smart decisions and planning. You can reduce your house purchase tax UK by:Selling your current property before buying anotherChecking first-time buyer eligibility earlyStructuring ownership correctlyTiming your purchase carefullyHow Cribs Estates Helps You Buy SmarterWe don’t just help you find a property, we help you understand the full cost of buying it.We support buyers and investors with:Accurate pricing guidance based on local market dataClear breakdown of stamp duty and total purchase costsAdvice on rental yield and long-term performanceSupport through the buying process from start to completionPlanning to buy? Speak with our experts to get clarity on taxes first.

Property search

Residential Lettings

Residential Sales

HMO

Commercial Sales Commercial Lettings

Price

Min price

Max price

Number of Bedrooms

Min bedrooms

Max bedrooms

Find properties