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What are the Different Types of HMO License?

Landlords Property Market
Posted in   Nov 18 , 2024

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.

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