Guide to Houses in Multiple Occupation (HMO)

A house in multiple occupation (HMO) is a property rented by at least three tenants forming more than one household, sharing facilities like a bathroom or kitchen. Forming more than one household typically means they’re not family or in a relationship.

Licensing

In England or Wales, a landlord wanting to rent out a property as an HMO should contact their council to check if they need a licence. 

• If you have a large HMO (5+ tenants) that fulfils the criteria above, a license will be required. There are very few exceptions to this.
• For smaller HMOs (3 to 4 tenants), it is recommended to check with the relevant local authority. A licence may or may not be required, depending on their stance.

Typically, renting a property to four or fewer occupants doesn’t require an HMO licence. That is unless the property is situated in a selective licensing area. Again, the local authority is the place to check.

Selective licensing

To stop houses traditionally used for families being turned into HMOs, a local authority may have implemented selective licensing. 

This may be due to the council considering there to already be a high number of HMOs in a particular place or perhaps there has been problems with landlords operating poor quality small HMOs previously. Licensing will require properties to be of a certain standard, eliminating poor quality housing.

License fees

These vary from authority to authority and are subject to change. For information on fees charged by local authorities visit this website. Local authorities may offer discounts on licensing fees through membership of landlord accreditation schemes, such as the NRLA.

Planning

For landlords who want to make changes to their property, it is important to have a working understanding of planning regulations.

Land uses are defined in the planning Use Class Order. “C” class properties mean they fall under residential use. 

• C3 is classified as a standard family/single occupancy dwelling
• C4 covers small HMOs (3 to 6 tenants)
• Sui Generis covers large HMOs of (7 or more tenants) 

In most cases, C3 properties do not need planning permission. It is allowed, under Permitted Development Rights to move between C3 and C4 classes.

However, if a local authority has implemented Article 4 it has the right to remove permitted development and investors will therefore need full planning permission to convert a single dwelling into an HMO.

Permitted development rights apply to C3 and C4 class dwellings and also cover works to dwellings including small extensions, loft and garage conversions amongst other things, dependent on size.

In no circumstances can you use permitted development to convert a property into a home occupied by 7 or more tenants, you will always need planning permission for that even if no physical changes are needed to the dwelling. Permitted development rights do not apply to flats.

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