HMO Licensing London: Rules and Requirements

HMO licensing London is one of the most misunderstood areas of compliance a landlord can face, because the rules change not just from England to London but from one borough to the next. A house in multiple occupation that needs no licence in one street can require one a mile away, depending on which additional or selective scheme the local council has adopted. Getting it wrong is expensive: renting out an unlicensed HMO that should be licensed is a criminal offence that can bring an unlimited fine, a rent repayment order, and a banning order. This guide sets out how HMO licensing London actually works, the three types of licence, how Article 4 directions add a planning layer on top, and how a landlord works out whether a property needs a licence right now.

In Short

HMO licensing in London at a glance

• Three licence types exist, mandatory, additional and selective, and London boroughs use them differently.
• A large HMO of five or more people from two or more households needs a mandatory licence anywhere in England.
• Additional and selective licensing are set locally, so the answer depends on the exact borough and area.
• An Article 4 direction can mean you need planning permission to create an HMO in the first place.
• Letting an unlicensed HMO is a criminal offence with an unlimited fine and rent repayment order risk.

HMO licensing London: the three licence types

HMO licensing London rests on three separate regimes, and a single property can be caught by more than one. Mandatory licensing applies across the whole country to any large HMO, defined as a property let to five or more people forming two or more separate households who share a kitchen, bathroom or toilet. Additional licensing is a scheme a council chooses to introduce to cover smaller HMOs, typically those with three or four occupiers from two or more households. Selective licensing goes wider still, covering all or most privately rented homes in a designated area regardless of whether they are HMOs at all. The gov.uk HMO licence guidance explains the mandatory regime, but the additional and selective schemes are published by each borough.

Why HMO licensing London varies by borough

Because additional and selective licensing are local decisions, London is a patchwork. One borough may license every HMO through a borough-wide additional scheme, while a neighbour licenses only a handful of wards, and a third relies on mandatory licensing alone. Schemes also run for fixed periods, usually five years, and are renewed, replaced or allowed to lapse, so a property that needed a licence three years ago may not today, and the reverse is equally true. Our detailed look at Greenwich HMO rules and regulations shows how one borough applies the rules in practice, and it is a useful illustration of just how specific the local picture can be. The only reliable answer for any given address is the current scheme published by that borough's council.

Article 4 directions: the planning layer

Licensing answers whether you can let an HMO; planning can decide whether you can create one. Normally, converting a standard family home into a small HMO for up to six people is permitted development and needs no planning application. An Article 4 direction removes that automatic right in a designated area, meaning a landlord must apply for planning permission before changing the property's use to a small HMO. Many London boroughs have Article 4 directions covering all or part of their area, so a landlord planning to convert a house into a shared home has to check both the licensing position and whether an Article 4 direction applies. Missing the planning step can leave a property that is impossible to license lawfully.

When you need an HMO licence

A licence is required if the property meets the definition of a licensable HMO under whichever schemes apply to its location. As a working test, a landlord should assume a licence is likely if the home is occupied by three or more tenants who form more than one household and share facilities, and confirm the exact position against the borough's schemes. For a full explanation of the underlying definition and the household test, our guide to what is an HMO breaks it down. The licence itself is granted by the council, lasts up to five years, and comes with conditions on room sizes, amenities, fire safety and management standards that the landlord must meet throughout.

Costs and penalties

Licence fees are set by each borough and vary widely, commonly running from a few hundred pounds to over a thousand for a five-year licence, often split into an application fee and a grant fee. The cost of getting it wrong is far higher. Operating a licensable HMO without a licence is a criminal offence that can be dealt with by an unlimited fine or a civil penalty, and it opens the door to a rent repayment order requiring the landlord to pay back up to 12 months' rent, as well as a possible banning order for serious or repeat offenders. Keeping licences current is part of the wider compliance picture set out in our London landlord's compliance calendar.

How AIHPG approaches this

At AIHPG, HMO compliance is handled as part of managing the property, not as a separate hurdle the landlord has to clear alone. We check which licensing schemes apply to the specific address, confirm whether an Article 4 direction affects any planned conversion, and make sure the property meets the room-size, amenity and fire-safety conditions a licence carries before an application goes in. Because we manage the tenancy day to day, the management standards a licence requires are simply how the let is run.

For landlords with shared houses across several boroughs, that removes the borough-by-borough guesswork entirely. You can see how it fits across our property management service, our service bundles, and the wider Included Difference.

Frequently asked questions about HMO licensing London

What is HMO licensing in London?

HMO licensing in London is the system of council permissions required to let a house in multiple occupation. It has three parts: mandatory licensing for large HMOs across England, and additional and selective licensing that individual boroughs choose to introduce for smaller HMOs or wider areas. Because the local schemes differ, whether a property needs a licence depends on its exact borough and address.

When does a property need a mandatory HMO licence?

A mandatory HMO licence is required anywhere in England for a large HMO, meaning a property let to five or more people who form two or more separate households and share a kitchen, bathroom or toilet. This applies regardless of the borough. Smaller HMOs may still need a licence where the council has an additional licensing scheme in place.

What is the difference between additional and selective licensing?

Additional licensing covers smaller HMOs, usually those with three or four occupiers from more than one household, that fall outside the mandatory scheme. Selective licensing is broader and covers all or most privately rented homes in a designated area, whether or not they are HMOs. Both are introduced locally by the borough for a fixed period, usually five years.

What is an Article 4 direction?

An Article 4 direction removes the automatic right to convert a family home into a small HMO without planning permission. In an area covered by such a direction, a landlord must apply for planning permission before changing the property's use to a small house in multiple occupation. Many London boroughs have Article 4 directions, so the planning position must be checked alongside licensing.

What happens if you let an unlicensed HMO?

Letting a licensable HMO without a licence is a criminal offence. It can be punished with an unlimited fine or a civil penalty, and it exposes the landlord to a rent repayment order of up to 12 months' rent and, for serious or repeat offences, a banning order. Tenants and councils can both apply for rent repayment orders, so the financial risk is significant.

How long does an HMO licence last?

An HMO licence is granted by the local council and usually lasts up to five years, after which it must be renewed. Throughout the licence period the landlord must meet its conditions on room sizes, amenities, fire safety and management standards. If a licensing scheme is renewed or replaced, landlords need to reapply under the current scheme when their licence expires.

This guide is general information for landlords, not legal advice. HMO licensing schemes, fees and conditions are set locally and can change; check the current position with the relevant London borough, and for your specific situation take professional advice.