If your London property houses five or more people from two or more households who share a kitchen, bathroom or toilet, it needs a mandatory HMO licence. Many boroughs go further, with additional licensing for smaller HMOs and selective licensing covering all rented homes in designated areas. Licences cost roughly £500–£1,500 per five years depending on the borough, and most landlords also face a schedule of compliance works. Letting an unlicensed HMO risks a £30,000 civil penalty.
When is an HMO licence mandatory?
Mandatory HMO licensing applies across every London borough on the same national test: the property is occupied by five or more people forming two or more households, who share at least one basic amenity such as a kitchen, bathroom or toilet.
A household means a single person, a couple or members of the same family living together. Five friends sharing a house are five households; a couple plus three individual sharers are four. The moment the count reaches five people across two or more households, the property is a licensable HMO regardless of how the tenancy agreement is written, and a single joint tenancy does not change the analysis.
Since 2018 there has been no storey requirement, so a two-storey terrace or even a large flat with five sharers is caught just as a four-storey townhouse is.
The licence attaches to the property and the licence holder, normally lasts five years, and requires the holder to pass a fit and proper person test covering convictions and previous housing enforcement. If you manage through an agent, the agent can hold the licence, but the obligations and the penalties reach the owner either way.
Additional and selective licensing: the borough lottery
Mandatory licensing is only the start in London, because boroughs can designate two further schemes, and most have.
Additional licensing extends HMO licensing to smaller HMOs, typically three or four sharers forming more than one household, sometimes covering the whole borough and sometimes specific wards. The majority of London boroughs run an additional scheme in some form, so a three-person flat share that needs no licence on one side of a street boundary can need one on the other.
Selective licensing goes further still: in a designated area, every privately rented property needs a licence, even a single-family let with no HMO characteristics. Newham has operated borough-wide schemes for years, and many other boroughs designate ward by ward, with schemes lapsing and renewing on five-year cycles.
The practical consequence is that you cannot rely on last year's knowledge. Schemes start, end and change boundaries, so check the borough's licensing pages before every new tenancy and before every purchase. Letting without a required licence is the same offence whether the missing licence was mandatory, additional or selective, and ignorance of a scheme has never succeeded as a defence.
What an HMO licence costs in London
Licence fees vary widely by borough, but across London the realistic range is £500–£1,500 per property for a five-year licence. Some boroughs charge a flat fee, others price per letting room, and most now split the fee into two parts: an application processing fee paid up front and a second instalment payable when the licence is granted.
Renewals are often slightly cheaper than first applications, and some boroughs discount for accredited landlords or for licensing multiple properties.
The fee, however, is rarely the real cost of licensing. The real cost is the works: fire doors, interlinked alarms, emergency lighting, room-size compliance and amenity upgrades that the council requires before or shortly after granting the licence. On a typical five-bedroom London HMO that has never been licensed before, compliance works of £3,000–£8,000 are normal, which dwarfs the fee itself.
Budget for both from the start. A landlord who treats the fee as the whole cost ends up improvising works under enforcement deadlines, which is the most expensive way to buy fire doors ever devised.
The works licensing inspections demand
Every borough publishes HMO standards, and the inspection schedule that follows an application reads from them. The recurring items are remarkably consistent across London.
Fire safety leads: FD30 fire doors with intumescent strips, smoke seals and self-closers to rooms opening onto the escape route; interlinked Grade D1 smoke and heat alarms, usually to LD2 coverage or better; emergency lighting where the escape route demands it; thumb-turn locks on final exit doors so tenants can escape without a key; and a fire blanket in the kitchen.
Then come space and amenity standards: minimum bedroom sizes, adequate kitchens for the number of sharers, and bathroom ratios, typically one bathroom and WC for every five occupants. Undersized rooms and missing amenities are where works escalate from hundreds into thousands, because the fix is building work rather than hardware.
The table shows typical 2026 costs for the items inspectors most commonly schedule. Councils normally set deadlines of three to six months for completing scheduled works, and they do follow up.
| Typical pre-licensing work | Cost (2026) |
|---|---|
| FD30 fire door with closer and seals, per door | £400 – £900 |
| Interlinked Grade D1 smoke or heat alarm, per unit | £80 – £150 |
| Emergency lighting, small system | £800 – £2,000 |
| Thumb-turn lock to final exit, per door | £60 – £120 |
| Fire blanket to kitchen | £20 – £40 |
| Partition or reconfiguration for undersized rooms | £1,200 – £5,000 |
Penalties: £30,000 fines and rent repayment orders
The enforcement regime around HMO licensing has real teeth, and London boroughs use it.
Letting or managing an unlicensed HMO is an offence. Councils can impose a civil penalty of up to £30,000 per offence as an alternative to prosecution, and they can stack penalties where multiple offences exist, for example an unlicensed HMO that also breaches management regulations. Prosecution through the courts carries an unlimited fine.
Rent repayment orders are the penalty landlords underestimate: tenants of an unlicensed HMO can reclaim up to twelve months of rent through a tribunal, and they do not need the council to act first. On a five-room London HMO that can exceed £40,000, payable on top of any civil penalty.
There is a quieter sanction too: while a property is unlicensed when it should be licensed, a Section 21 notice cannot validly be served, so you cannot recover possession by that route. Repeat or serious offenders face banning orders and entry on the national rogue landlord database.
Against all of that, a £500–£1,500 fee and a planned schedule of works is not a burden; it is the cheap option by an order of magnitude.
How the application and inspection process works
Applications are made online to the borough, and a complete file moves much faster than a partial one. Expect to supply floor plans with room dimensions, current gas safety and electrical installation condition reports, alarm details, tenancy information, and the fit and proper person declarations for the licence holder and manager.
After the application, the borough may grant a draft licence and inspect later, or inspect first; practice varies, and post-pandemic backlogs mean some boroughs take months to visit. You are normally allowed to operate as an HMO while a valid, complete application is being processed, which is one more reason to apply before the council writes to you rather than after.
The inspection itself walks the property against the published standards: doors, alarms, escape route, room sizes, kitchens, bathrooms and general condition. The outcome is a licence with conditions, usually including a schedule of works with deadlines, commonly three to six months.
Treat the schedule like a contract. Completing works on time, with photographs and certificates sent to the case officer, builds the kind of file that makes the next renewal quick and keeps you off the enforcement radar entirely.
Getting licence-ready before the inspector visits
The cheapest licensing inspections are the ones that find nothing, and that outcome is entirely buyable in advance.
Start with a pre-licensing survey against your borough's published HMO standards: measure every letting room, walk the escape route, test the alarms, check every door with a gap gauge and list the variances. This turns the unknown into a priced schedule before the council is involved, and it lets you negotiate from knowledge if an officer asks for more than the standards require.
Then do the works as one package rather than trade by trade. Fire doors, alarms, emergency lighting and any partition work share scaffolding of a different kind: access to tenanted rooms, parking, waste and making good. One mobilisation costs meaningfully less than four, and the property is disrupted once instead of repeatedly.
A typical five-bedroom London HMO goes from unlicensed condition to fully compliant for £3,000–£8,000 at 2026 prices, almost always less than a single civil penalty and a fraction of a rent repayment order. Apex London delivers exactly this as a pre-licensing compliance package, with the certificates and photographic evidence bundled for the council; call 020 3962 0455 for a survey.
Frequently Asked Questions
Which properties need a mandatory HMO licence in London?
Any property occupied by five or more people forming two or more households who share a kitchen, bathroom or toilet, in every London borough. There is no storey requirement, so large flats and two-storey houses are caught. Smaller HMOs may also need a licence under a borough additional licensing scheme.
How much does an HMO licence cost in London?
Typically £500–£1,500 for a five-year licence depending on the borough, often split into application and grant instalments. The bigger cost is usually compliance works: a previously unlicensed five-bed HMO commonly needs £3,000–£8,000 of fire doors, alarms, lighting and amenity upgrades.
What works will the council demand for an HMO licence?
The recurring schedule is FD30 fire doors (£400–£900 each), interlinked Grade D1 alarms (£80–£150 per unit), emergency lighting where the escape route needs it (£800–£2,000), thumb-turn final exit locks, a kitchen fire blanket, plus minimum room sizes and bathroom ratios of roughly one per five occupants.
What is the penalty for running an unlicensed HMO?
Councils can impose civil penalties of up to £30,000 per offence, or prosecute with an unlimited fine. Tenants can separately claim back up to 12 months of rent through a rent repayment order, and you cannot serve a valid Section 21 notice while the property is unlicensed.
Can I let the property while my HMO application is processed?
Generally yes: a duly made, complete application protects you while the borough processes it, even if the inspection takes months. The protection only applies once the application is validly submitted with the fee, which is why applying before the council contacts you matters so much.