Do I need a HMO licence for 3 tenants?

In England, you don’t usually need a mandatory HMO licence for 3 tenants. Mandatory licensing applies to HMOs with 5 or more people from 2 or more households. But many councils run additional licensing schemes that cover smaller HMOs, including those with 3 or 4 tenants, so you must check with your local council before you let.

This guide explains when a property with 3 tenants counts as an HMO, which licences might apply, and what happens if you get it wrong.

Key takeaways

A property let to 3 or more people from 2 or more households, who share facilities, is an HMO.
Mandatory HMO licensing in England only applies to 5 or more people.
Your council may still require a licence for 3 tenants through an additional or selective licensing scheme.
Planning rules, known as Article 4 directions, can apply even when no licence is needed.

Is a property with 3 tenants an HMO?

A property is a house in multiple occupation (HMO) if:

At least 3 tenants live there
They form more than 1 household
They share a toilet, bathroom or kitchen

So 3 friends sharing a house is an HMO. A family of 3 renting a house isn’t, because they’re one household. A couple and one friend is an HMO, because that’s 2 households.

New to HMOs? Read our guide to what an HMO is.

The three types of HMO licence

1. Mandatory licensing

Required across England for HMOs with 5 or more people forming 2 or more households. A property with 3 tenants doesn’t need a mandatory licence.

2. Additional licensing

Councils can choose to license smaller HMOs in all or part of their area. Many additional licensing schemes cover HMOs with 3 or 4 tenants. If your property is in one of these areas, you need a licence for 3 tenants.

3. Selective licensing

Some councils require a licence for all privately rented homes in certain areas, whether they’re HMOs or not.

How to check if you need a licence

Go to your council’s website and search for “HMO licensing” or “property licensing”.
Check whether there’s an additional or selective licensing scheme, and which streets or wards it covers.
If you’re unsure, contact the council’s private housing team before your tenants move in.

Do you need planning permission for a 3 person HMO?

Usually not. Changing a family home into a small HMO for 3 to 6 people is normally allowed without planning permission. But many councils use an Article 4 direction to remove that right in certain areas. Where one applies, you need planning permission before you convert, even for 3 tenants.

Licensing and planning are separate. You may need one, both or neither. For the full picture on every licence type, read our guide to HMO licences.

What rules apply even without a licence?

Every HMO must meet HMO management regulations, whether it’s licensed or not. That includes:

Fire safety, including smoke alarms and safe escape routes
Annual gas safety checks
Electrical safety checks at least every 5 years
Keeping shared areas clean and in good repair
Displaying the manager’s contact details in the property

What happens if you don’t get a licence?

Letting an HMO that needs a licence without one is a criminal offence. Councils can issue large civil penalties, and tenants can apply for a rent repayment order to claim back rent they’ve paid. The Renters’ Rights Act has increased councils’ enforcement powers, so it’s worth getting right.

Thinking of building an HMO business?

HMOs can deliver strong rental income, but the rules are local and detailed. Sourced Property Partners get training on HMO strategy, including licensing, planning and the numbers, plus support to find HMO deals for investors.

Read more about the operating costs of an HMO.

Frequently asked questions

Do I need an HMO licence for 3 tenants?

Not under mandatory licensing in England, which starts at 5 people. But your council may require one through an additional licensing scheme, so always check locally.