1. What Is an HMO?
A House in Multiple Occupation (HMO) is a property rented out by three or more people who are not from the same household (for example, they are not family members or couple living together) and who share facilities such as a kitchen, bathroom, or toilet.
Common examples include student houses, professional house-shares, and converted buildings with bedsits.
Under the Housing Act 2004, a property is an HMO if all three conditions are met:
HMOs are important to the UK housing market. They provide affordable, flexible housing for students, young professionals, and low-income tenants.
2. The Big Council Tax Change (December 2023 Onwards)
2.1 What Changed?
On 1 December 2023, The Council Tax (Chargeable Dwellings and Liability for Owners) (Amendment) (England) Regulations 2023 came into force. This was the single biggest change to HMO council tax in years. It means:
2.2 What Is Disaggregation (and Why Did It End)?
Disaggregation was when the VOA split an HMO into separate units, giving each tenant a separate council tax bill. This caused major problems:
The NRLA and the HMO Council Tax Reform Group campaigned to end this practice, and the government agreed.
2.3 What About Properties That Were Already Split?
If your HMO was previously disaggregated (split into multiple council tax bands), here is what happens:
Key Tips for Landlords
If you are liable for council tax, make sure your rent is set with that cost in mind. Under the Tenant Fees Act 2019, council tax can either be included within the rent, or the tenancy agreement can require the tenant to pay council tax directly to the local authority (but you cannot charge the tenant a separate additional amount payable to you for council tax)
2.4 Exceptions
3. HMO Licensing Requirements: You need to know
Three Types of Licence
Licence Type
When It Applies
Key Details
Mandatory Licence | Property has 5 or more people/occupiers from 2 or more households (any number of storeys since 2018). | Required everywhere in England where the property meets the criteria Applied for through your local council. Usually lasts 5 years. |
Additional Licence | Smaller HMOs in areas where the local council has declared an additional licensing zone (what is included depends entirely on the council’s designation.) | Not everywhere – check your local council. It is expanding rapidly as many councils are adding new areas in 2025/26 |
Selective Licence | All rental properties (not just HMOs) in areas the council has designated as requiring selective licensing. | Targets areas with poor housing conditions or antisocial behaviour. no longer required to obtain confirmation from the Secretary of State before implementing a selective licensing scheme of any size, but they must still meet the statutory requirements and consult |
What happens when incorrect licence is used?
Landlords who rent without the correct licence risk fines up to £30,000 and repayment orders.
What you need to Apply for License?
Requirements vary by council, but you will usually need the application form and fee, a floor plan, and core safety documents. These typically include the Gas Safety Certificate, EICR, EPC and fire safety paperwork (for example a fire risk assessment). Many councils also request a sample tenancy agreement and PAT certificates if you provide electrical appliances.
Note
Always check your local council’s licensing rules before buying or letting an HMO. If a property is licensable and you operate it without the required licence, this is an offence. The council may prosecute and/or impose a civil penalty of up to £30,000 as an alternative to prosecution. Tenants and councils may also seek a rent repayment order
4. The Renters’ Rights Act 2025: What HMO Landlords Must Know
The Renters’ Rights Act 2025 received Royal Assent on 27 October 2025. It is the biggest reform to England’s private rental sector in almost 40 years. The main provisions take effect from 1 May 2026.
Here is what matters for HMO landlords:
4.1 Key Changes
Change
What It Means for You
Section 21 Abolished | From 1 May 2026, section 21 ‘no-fault’ eviction ends. Landlords must rely on section 8 possession grounds (including updated grounds such as selling or moving in, as well as fault grounds like arrears/ASB) |
Fixed-Term Tenancies Ended | Fixed-term ASTs are replaced by Assured Periodic Tenancies from 1 May 2026 (most existing and new PRS tenancies convert automatically). Landlords will still have some compliance steps, including issuing the government information sheet for existing tenancies by 31 May 2026. |
Tenant Notice Period | Tenants can leave by giving just 2 months’ notice. |
Rent Bidding Banned | Landlords/agents must advertise an asking rent and must not ask for, encourage, or accept offers above that advertised rent |
Pet Requests | Tenants can request a pet in writing. Landlords must consider the request and cannot refuse without a fair/reasonable reason, and must respond within 28 days |
Discrimination Banned | From 1 May 2026 it becomes unlawful to discriminate against renters because they have children or receive benefits (including discouraging them, refusing viewings, or refusing to grant a tenancy), subject to limited exceptions. |
Higher Penalties | First breaches: fines up to £7,000. Repeat or serious offences: up to £40,000 or prosecution route. Rent Repayment Orders now cover up to 2 years’ rent (previously 12 months). |
4.2 Student HMO Landlords: Ground 4A
If you let to students in an HMO and want to recover the property at the end of each academic year, there is a new possession ground called Ground 4A.
To use it, you must give the tenant a written statement of your intention to rely on Ground 4A, and give 4 months’ notice specifying a move-out date between June and September.
5. Safety and Compliance Standards
Fire Safety
New regulations mandate enhanced fire safety measures, including interlinked smoke and heat detectors and fire-resistant doors. These modifications are substantial, with retrofit costs averaging £41,000 per property.
Requirement for servicing and maintenance of fire alarm, detection system and suppression system (if installed) has been altered to be in accordance with BS5839 Part 6.
Energy Performance Certificates
The new regulations mandate Energy Performance Certificate (EPC) Band C for HMOs by 2025 to 2026. This represents a significant compliance challenge for many landlords. Standard upgrades such as insulation, LED lighting, and efficient boilers can cost £2,000 to £7,000 per property.
Electrical Safety
Electrical Installation Condition Reports (EICR) are required every five years. Properties with reports from 2020 are now due for renewal.
Gas Safety
Annual gas safety checks remain mandatory.
Awaab's Law
The introduction of Awaab's Law accelerates damp and mould remediation processes, placing additional responsibility on landlords to maintain higher property standards and tenant health and safety.
6. Upcoming Reforms and What to Expect
Renters' Rights Act 2025
The Renters' Rights Act 2025 achieved Royal Assent on 27 October 2025 and introduces groundbreaking shifts, most notably the abolition of Section 21 no fault evictions. The main provisions will come into effect on 1 May 2026, fundamentally changing how landlords manage tenancies.
Increased Council Powers
Local councils are likely to gain more power to enforce licences and HMO inspections. After the 2026 regulations, enforcement will apply more consistently across the UK.
Digital Compliance
The new rules may also require digital submission of HMO documents, such as gas safety certificates, electrical reports, and tenant details. This could make it easier for councils to track compliance in real time.
Regular Inspections
Local authorities are expected to conduct regular compliance checks. You should maintain comprehensive records of all safety certificates, maintenance work and tenant communications.
Conclusion: What Landlords Must Do Now
Contact your local authority housing department for specific guidance on licensing requirements and local standards. They can provide tailored advice based on your area. If you are unsure about any aspect of HMO compliance, seek professional advice from a property solicitor or specialist letting agent.
- What are the Fines for Tax Evasion in the UK - 30 September 2026
- Why You Shouldn’t Accept HMRC’s Rental Income Calculation Without a Review - 30 July 2026
- How HMRC Finds Out About Undeclared Rental Income - 25 May 2026
