There are about 4.3 million households in the private rented sector in England. About 500,000 are houses in multiple occupation (HMO). A house is an HMO if both of the following apply:

  • at least 3 tenants live there, forming more than 1 household
  • the occupants share a toilet, bathroom or kitchen facilities with other tenants.

For large HMO's (note the requirements are not considered here) the landlord must register property with the local authority and obtain a licence. However national mandatory licensing currently only applies if properties are three or more storeys. 

Each local authority will grant different conditions under a licence and these must be carefully considered and met by the landlord. The requirement of an HMO licence adds to the cost of establishing a rental property but if a landlord rents out such a property without a licence or does not meet the licence conditions they can expect the local authority to prosecute.

It is now proposed that flats and one and two-storey properties would also be subject to licensing. This aims to crack down on overcrowding and it is estimated that about 160,000 homes will be affected by the new proposals.