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HMOs and shared housing
In England, a house in multiple occupation with five or more people forming two or more households usually needs a mandatory licence under Part 2 of the Housing Act 2004. Licensing status shapes both your legal exposure and what your insurer will ask.
Part of: HMO landlord insurance
In short
Mandatory HMO licensing in England covers HMOs occupied by five or more persons in two or more households that meet the building tests in the 2018 Prescribed Description Order. Councils can also license smaller HMOs through additional licensing. Running an unlicensed HMO is an offence under section 72 of the Housing Act 2004. Since 1 May 2026 the Renters' Rights Act 2025 has extended that offence to superior landlords and let rent repayment orders cover up to two years, and separate regulations have raised the maximum civil penalty to £40,000. Insurance does not usually pay fines or repayment orders, so licensing is the protection.
Section 61(1) of the Housing Act 2004 says every HMO to which Part 2 applies must be licensed, unless a temporary exemption or a management order applies. Part 2 applies to HMOs of a prescribed description, and to HMOs in any area a council has designated for additional licensing.
The prescribed description is in article 4 of the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018, in force since 1 October 2018. An HMO falls within it if it:
Councils can also use selective licensing under Part 3 for privately rented homes in a designated area. Check the council's website for each address, because additional and selective schemes vary by area.
Before granting a licence the council must be satisfied, among other things, that the proposed licence holder is a fit and proper person and that the management arrangements are satisfactory (section 64). A licence must include the conditions in Schedule 4 (section 67(3)), and it cannot last more than five years (section 68(4)).
The Mandatory Conditions of Licences Regulations 2018 added minimum room sizes from 1 October 2018:
| Room used for sleeping by | Minimum floor area |
|---|---|
| One person aged over 10 | 6.51 square metres |
| Two persons aged over 10 | 10.22 square metres |
| One person aged under 10 | 4.64 square metres |
| Any room under 4.64 square metres | Not to be used as sleeping accommodation |
The same regulations require the licence holder to comply with any council scheme for household waste. Separately, the HMO management regulations, enforced under section 234, impose duties on the manager covering fire safety measures, water and drainage, gas and electricity supply, common parts and waste. Our pages on the Fire Safety Act 2021 for landlords and electrical testing for landlords go further.
Under section 72 of the Housing Act 2004:
Instead of prosecuting, a council in England can impose a civil penalty under section 249A. Since 1 May 2026 the maximum is £40,000, under the Financial Penalties (Housing Offences and Breach of Banning Orders) Regulations 2026. Government guidance says a council cannot both prosecute and impose a civil penalty for the same offence, and that each failure to comply with the management regulations is a separate offence.
The Act received Royal Assent on 27 October 2025. The sanctions provisions in Part 4 relevant here, including sections 103 and 105, came into force on 1 May 2026.
| Change | Effect for HMO landlords |
|---|---|
| Section 72 offence extended (section 105) | Superior landlords, such as owners letting to rent-to-rent operators, can commit the unlicensed HMO offence |
| Rent repayment orders (section 103) | Orders can be made against superior landlords, landlords named together are jointly and severally liable, and the period can be up to two years |
| Civil penalties (same date, under separate regulations) | Maximum under section 249A raised from £30,000 to £40,000, according to government guidance on civil penalties |
The guidance applies to offences committed on or after 1 May 2026. The wider tenancy changes are set out in our Renters' Rights Act timeline for landlords. Owners who let to an operator should read rent-to-rent insurance, because the owner can now be drawn in directly.
Insurers commonly ask whether each HMO is licensed, who holds the licence and when it expires, how many occupiers and households there are, and what fire precautions are in place. A few points matter at claim time:
Illustrative example: a five-bedroom house let to five sharers is not licensed because the owner never checked whether it needed one. A kitchen fire damages the house. The insurer reviews the occupancy, the council investigates, and the occupiers seek a rent repayment order. Insurance may pay for the fire damage; it will not usually pay the order.
Owners with guest-facing lets should also read guest injury liability and our holiday let insurance guide. For the policy itself, see HMO landlord insurance.
Apex arranges cover for HMOs, holiday lets and short lets. To quote we need each address and property type, the number of occupiers and households, licence status and expiry, who manages the property, rental income, claims history and any council notices in the last five years. A broker reads each enquiry and comes back with options, and there is no fee for a quote. Cover is always subject to the insurer's acceptance and the policy terms.
In England, a mandatory licence is needed if the HMO is occupied by five or more persons in two or more households and meets the building tests in the 2018 Prescribed Description Order. Your council may also require a licence for smaller HMOs under additional licensing, or for other rented homes under selective licensing, so check each address.
Running an unlicensed HMO is an offence under section 72 of the Housing Act 2004, punishable by a fine. In England the council can instead impose a civil penalty of up to £40,000 under section 249A. Occupiers or the council can also seek a rent repayment order covering up to two years.
Do not expect it to. Liability policies commonly exclude fines, penalties and rent repayment orders. Some legal expenses policies help with defence costs, subject to their terms. Keeping licences current and meeting the conditions is the real protection.
Since 1 May 2026, yes. The Renters' Rights Act 2025 amended section 72 so a superior landlord can commit the offence, and a tenancy term on its own is not a defence. Rent repayment orders can also be made against superior landlords, with joint and several liability.
Yes. Insurers price HMOs differently from single lets and commonly ask about licence status, occupier numbers and fire precautions. If the property became an HMO after the policy started and the insurer was not told, a claim can be reduced or declined.
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Start a commercial enquiry Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
