If you’re letting a property to three people who are not from the same family, sharing a kitchen, bathroom and/or toilet, you may well have what’s legally defined as a House in Multiple Occupation (HMO). This is a property in which three or more individuals from more than two different households can live under the same roof and share amenities while having their own private bedroom.
While having an HMO can be a lucrative, high yield investment, it does mean a bit more admin at the start. If your property is classed as an HMO by the council then you will require an additional licence and be required to adhere to additional compliance requirements.
But people often ask: “Do I need an HMO licence in every case for three tenants?”
The answer is: not always. Under national rules, a licence becomes mandatory only when there are five or more tenants from more than one household sharing basic facilities.
That said, the answer will be different depending on your location as the decision is dependent on your local council. Read on for a clearer breakdown of when a 3-tenant property is licensable and what landlords should check before letting.
Understanding HMO Licences:
A property is likely to be classed as an HMO if:
▪ It’s occupied by people from more than one household (e.g. friends, not a single family).
▪ The occupiers share communal facilities (e.g. kitchen, bathroom or toilet).
▪ There are at least three unrelated occupants under one roof.
So, three friends sharing a 3-bed flat, each with separate rooms but shared kitchen/bathroom, can often qualify as an HMO.
An HMO licence is automatically required if:
▪ The property houses 5 or more people from 2+ households sharing facilities.
So, a 3-tenant property does not automatically require the “mandatory HMO licence”, but a 5-tenant property does.
Why 3-Tenant HMOs can still need a licence:
Local councils have the power to introduce additional or selective licencing schemes for landlords, regardless of the size of the property and number of tenants. These are in place to ensure a decent standard of housing.
On top of this, a property with as little as three tenants may still need an HMO licence depending on where the property is located. For example, some councils in major cities (especially London and other high-density/ high-student-population areas) have extended licencing to smaller HMOs to improve safety, reduce poor-quality rental stock and regulate shared housing.
This means even if your property doesn’t qualify under the national mandatory scheme, you still need to check your local council’s HMO licencing policy.
Other compliance obligations remain even without a licence
Whether or not a licence is required, landlords of shared properties should ensure compliance with basic health and safety, management and amenity standards set under national regulations (e.g. adequate fire safety, proper plumbing, minimum room sizes, maintenance, waste disposal, etc.).
If you do need a licence due to mandatory or local-additional licencing, failing to obtain one can lead to serious consequences such as fines, rent repayment orders, or a ban on letting.
So, what does this mean for landlords (or would-be investors)?
▪ If you plan to let to 3 people who are unrelated and share facilities, treat the property as a potential HMO from the start.
▪ Check your local council’s policy on licencing: do they require an HMO licence for small, shared properties?
▪ Even if a licence isn’t required, make sure you comply with all the necessary health, safety and management standards for shared housing.
▪ When in doubt, consult the local housing department or get professional advice.
FAQs
Q: How much does an HMO licence cost for a small property?
A: Costs vary by local council, but many charge between £500–£1,500 for a licence. Some councils calculate fees per bedroom, while others charge a flat rate. Find your cost from the housing department of your local council.
Q: How long does an HMO licence last?
A: Most HMO licences are valid for five years, though some councils issue shorter licences for first-time landlords or certain property types.
Q: Does the number of bedrooms affect whether I need a licence?
A: Not directly. It's the number of tenants and households, not bedrooms, that triggers HMO classification. However, room size standards still apply even to unlicenced HMOs.
Q: Are student houses automatically HMOs?
A: Most student houses with 3+ unrelated tenants meet the definition of an HMO, but whether they need a licence depends on your local council’s rules.
Q: How long does it take to get an HMO licence approved?
A: It varies, but most councils take between 4 and 12 weeks depending on inspection availability and application volume.
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