01 · FrameworkThree regimes, one Act
Every licensable private-rented property in London sits inside the same statute: the Housing Act 2004. What changes between the three licensing regimes is which part of the Act catches the property, what triggers the duty, and whether the council had to designate the area by order. Part 2 of the Act contains the HMO licensing framework (Mandatory and Additional); Part 3 contains the Selective licensing framework (for all privately rented homes, not just HMOs). A property sits under one of the three regimes, depending on how many people occupy it, how many households it contains, and what the local authority has designated for that specific area.
Three things matter before diving into the specifics. First, these regimes are separate from planning permission, a property in an Article 4 Direction area may need both planning permission and a licence, granted by different council teams. Second, a single property normally falls under only one of the three licensing regimes; the regimes are not cumulative in that sense. Third, licensing is separate from HMO management duties: even a property that does not need a licence still has to satisfy HHSRS hazard standards, fire-risk-assessment duties, and HMO management regulations (where the HMO definition under s.254 Housing Act 2004 applies).
The one question to ask first
"Is my property, at its current occupancy, above or below the Mandatory HMO threshold?" If above, the Mandatory regime applies everywhere in England. If below, go to the council's website and look up whether an Additional HMO designation or a Selective designation covers the property's ward or postcode. Those two checks together answer whether you need a licence, and which one.
02 · MandatoryMandatory HMO Licensing, the national baseline
Mandatory HMO Licensing applies everywhere in England. There is no council designation step; the duty attaches to the property wherever it sits. It is set out in Part 2 of the Housing Act 2004, principally sections 55 and 61–62, with the current trigger thresholds set by the Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2018, which removed the previous three-storey requirement.
Trigger. A property is a licensable HMO under the Mandatory regime if it is occupied by five or more persons forming two or more separate households who share basic amenities (kitchen, bathroom or toilet). Storey count no longer matters; a 2-storey 5-person shared house is in scope, just like a 6-storey 12-bedsit conversion.
Applicant. The person having control of the property (usually the landlord or leaseholder) must apply for the licence before the HMO begins to be operated. Operating a licensable HMO without the licence is a criminal offence under s.72; the council can also issue a civil penalty of up to £30,000 as an alternative to prosecution, and a tenant can apply for a Rent Repayment Order up to 12 months' rent.
Conditions. Every Mandatory licence carries mandatory conditions set in the Act (annual gas safety certificate, annual declaration that every electrical installation is safe, installed and maintained smoke alarms, and so on), plus discretionary conditions added by the council. Conditions typically cover occupancy caps, room-size minima, fire safety to LACORS-based standards, refuse management, and anti-social behaviour responses. Breach of a condition is an offence under s.72.
Duration. Maximum five years. Renewal is a fresh application.
03 · AdditionalAdditional HMO Licensing, the council-designated extension
Additional HMO Licensing extends the HMO licensing duty to smaller HMOs, typically those below the Mandatory five-person threshold, in areas where the council has evidenced a case. The power sits in sections 56 and 57 of Part 2 of the Housing Act 2004.
Trigger. Applies where the council has formally designated an Additional HMO Licensing scheme. Most designations catch HMOs with three or more persons forming two or more households sharing amenities, the so-called Class C4 small HMO definition (matching the planning-use-class threshold discussed in the Article 4 Direction article). Some councils go broader.
Designation process. Council consults for at least 10 weeks, evidences the case (poor conditions, anti-social behaviour, high concentration of HMOs), publishes the designation, and runs it for up to five years. Since the Housing and Planning Act 2016 reforms, schemes covering more than 20% of the borough area or more than 20% of rented dwellings require Secretary of State confirmation. Designations must be reviewed before renewal; coverage is not automatic.
How to check. Every borough with Additional Licensing publishes a scheme map or postcode finder on its licensing webpage. Our HMO Licensing London Borough-by-Borough Guide keeps the current picture borough-by-borough.
Conditions and duration. Same mandatory-condition framework as Mandatory HMO Licensing, with council discretion to add further conditions. Maximum five years per licence.
04 · SelectiveSelective Licensing, every rental, not just HMOs
Selective Licensing is the outlier of the three because it does not care whether the property is an HMO. It catches every privately rented property in a designated area, from single-let family homes to one-bedroom flats and shared houses. The power sits in Part 3 of the Housing Act 2004, principally section 80.
Trigger. Applies where the council has formally designated a Selective Licensing scheme. Unlike HMO licensing, occupancy count is not the trigger, any private-sector tenancy in the designated area is in scope (subject to a handful of exemptions, principally for Registered Providers of social housing and properties already requiring a mandatory HMO licence).
Why councils designate. Selective Licensing exists under s.80(3)–(6) for one of four statutory grounds: low housing demand, significant anti-social behaviour, poor property conditions, or high levels of deprivation linked to the private-rented stock. Councils typically designate Selective schemes in wards where tenancy churn, ASB and disrepair converge. London examples have included Newham (borough-wide since 2013), Waltham Forest (parts), Croydon, Enfield, Redbridge (parts), and others.
Conditions and duration. Mandatory conditions mirror the HMO regime (gas safety, electrical safety, smoke alarms, tenant-behaviour undertakings). Councils add discretionary conditions around tenancy management, right-to-rent checks, deposit protection documentation, and often structured anti-social-behaviour complaint response. Maximum five years per licence; five-yearly review of the designation under s.84.
Overlap with HMO licensing. A property that is already licensable under Mandatory HMO Licensing is exempt from Selective Licensing on the same property (s.79(2)(b)). Additional HMO Licensing is the more nuanced overlap, some councils run Additional Licensing and Selective Licensing in the same ward, with property-size-banded fee schedules.
05 · MatrixThe comparison matrix, three regimes, side by side
The comparison below pulls the three regimes onto a single reference matrix. Use it as the starting point for any landlord-portfolio review.
| Aspect | Mandatory HMO | Additional HMO | Selective |
|---|---|---|---|
| Statutory basis | Housing Act 2004 Part 2, s.55 | Housing Act 2004 Part 2, s.56-57 | Housing Act 2004 Part 3, s.80 |
| Scope | HMOs only | HMOs only | All privately rented homes (not just HMOs) |
| Trigger | 5+ persons forming 2+ households sharing amenities. National threshold. | Council-designated. Typically 3+ persons, 2+ households (Class C4). | Council-designated. All private tenancies in the area (subject to narrow exemptions). |
| Designation required? | No, applies nationally | Yes, council order after ≥10 weeks' consultation | Yes, council order after ≥10 weeks' consultation; statutory-ground tested |
| Secretary of State confirmation | Not applicable | Required if >20% of area or >20% of rented stock covered | Required if >20% of area or >20% of rented stock covered (Housing & Planning Act 2016) |
| Typical fee (London) | £800–£1,500 per property, 5 years | £600–£1,500 per property, 5 years | £600–£1,000 per property, 5 years |
| Offence of unlicensed operation | s.72 HA 2004 | s.72 HA 2004 | s.95 HA 2004 |
| Civil penalty alternative | Up to £30,000 (HPA 2016 s.126) | Up to £30,000 (HPA 2016 s.126) | Up to £30,000 (HPA 2016 s.126) |
| Rent Repayment Order | Up to 12 months' rent (HPA 2016) | Up to 12 months' rent (HPA 2016) | Up to 12 months' rent (HPA 2016) |
| Maximum licence term | 5 years | 5 years | 5 years |
| Scheme review cadence | Not time-limited | 5-yearly review before renewal | 5-yearly review before renewal (s.84) |
Licences do not transfer
A licence is property-specific and personal to the licence holder. Sell the property and the new owner needs a fresh licence, there is no automatic transfer. Change the operator (landlord to agent or vice versa) and the licence variation must be applied for. Portfolio landlords often miss this at sale or during ownership restructures; the first indication is usually an enforcement notice.
The landlords who get licensing wrong almost always get it wrong on geography, not on occupancy. They buy a property on the understanding that it is "below the HMO threshold" and miss that the council designated Additional Licensing for the ward two years ago. The fix is always a retrospective licence application with an enforcement-history asterisk.
06 · Worked exampleTwo adjacent properties, two different regimes
Two neighbouring terraces on the same London street, different licences
A landlord owns two near-identical Victorian terraces next door to each other on a street in an outer-London borough. Both are let out. The first is a single-let family home rented to one household. The second is a 4-person shared-house HMO with two couples. The borough operates Selective Licensing ward-wide and Additional HMO Licensing (3+ persons, 2+ households) in the same ward. Here is how each property sits under the three regimes.
- Property A · Single-let family home. Not an HMO (single household). Not caught by Mandatory HMO Licensing (not an HMO). Not caught by Additional HMO Licensing (not an HMO). Caught by Selective Licensing, any private rental in the designated ward falls under s.80. Licence required before the tenancy starts; fee roughly £750, five-year term.
- Property B · 4-person shared-house HMO. HMO under s.254 HA 2004 (3+ persons, 2+ households sharing amenities). Below the Mandatory 5-person threshold, so not caught by Mandatory HMO Licensing. Caught by Additional HMO Licensing because the ward is designated. Not caught by Selective Licensing because s.79(2)(b) exempts HMOs that are licensable under HMO licensing. Licence required; fee roughly £1,200, five-year term.
- Alternate scenario · Property B upgraded to 5 persons. Add a fifth person to Property B (a second couple becomes a group of three, or a single tenant moves into the front room, pushing occupancy from 4 to 5). The property now crosses the Mandatory threshold. Caught by Mandatory HMO Licensing, which overrides the Additional designation for that property. Existing Additional licence must be surrendered or varied; Mandatory licence applied for.
- Alternate scenario · Council designation changes. Council withdraws its Additional Licensing designation at five-year review. Property B (4-person HMO) no longer requires an HMO licence. BUT Selective Licensing remains designated, and since Property B is no longer a licensable HMO the s.79(2)(b) exemption no longer applies, Selective Licensing now catches Property B. Landlord must apply for Selective licence on Property B at renewal.
- Landlord's practical view. For a single landlord holding two properties in the same ward, the licence-tracking cadence is five-yearly per property, with an annual portfolio review to check whether the ward's designations have changed. Under the Renters' Rights Act 2025 landlord portal, this picture will be centralised, all licence statuses will be visible from one dashboard once the portal provisions commence.
Check annually
Licensing designations are five-year schemes, but borough licensing maps change more often than the five-year cadence suggests, partial renewals, ward additions and new scheme consultations can all change coverage within a scheme's life. For portfolio landlords, an annual borough-by-borough licensing check is the operational cadence that keeps enforcement risk at zero.
07 · FAQsQuestions landlords keep asking
What is the difference between Mandatory, Additional and Selective licensing?
All three sit under the Housing Act 2004 but catch different properties. Mandatory HMO Licensing (Part 2, s.55) applies nationally to large HMOs with 5+ persons forming 2+ households sharing amenities. Additional HMO Licensing (Part 2, s.56-57) is a local designation catching smaller HMOs (typically 3-4 persons, 2+ households) in a defined area. Selective Licensing (Part 3, s.80) applies to all privately rented homes (not just HMOs) in a designated area. A single property can fall under only one of the three, but which one depends on occupancy AND on what the local authority has designated for the area.
Do I need a licence if my HMO is under the Mandatory threshold?
Yes if the borough has designated Additional Licensing covering your property, or if Selective Licensing covers the area. Outside designated areas, a small HMO below the Mandatory threshold does not require a licence under the Housing Act 2004 framework, but it still needs to satisfy HMO management regulations, HHSRS hazard standards, fire risk assessment, and any relevant fire-safety and electrical certification duties.
How does a council designate Additional or Selective Licensing?
Under Part 2 s.56 (Additional) or Part 3 s.80 (Selective), a council may designate by order covering either the whole borough or a specified area. The council must consult for at least 10 weeks, evidence a case for the scheme (generally poor housing conditions, anti-social behaviour, low demand, or high concentration of HMOs), and publish the designation. Schemes covering more than 20% of the borough area or more than 20% of privately rented dwellings require Secretary of State confirmation. Designations last up to five years.
What are the civil penalty fines for operating without a licence?
Operating a licensable property without a licence is a criminal offence under s.72 (HMO licensing) or s.95 (Selective licensing). Instead of prosecution, the council may impose a civil penalty of up to £30,000 per offence as an alternative, under the Housing and Planning Act 2016 s.126. The landlord can also face a Rent Repayment Order of up to 12 months' rent at the First-tier Tribunal, and banning-order proceedings for serious or repeat offending.
What fees apply to each licence type?
Fees are set by each local authority and typically range from around £600 to £1,500 per property across London. Many councils offer fee discounts for accredited landlords or multiple properties. Fees must reflect the cost of the licensing function and cannot be used as a revenue source (per the Hemming Supreme Court decision). Applications typically split the fee between application (upfront) and grant (payable when the licence is issued).
Can I hold one licence across multiple properties?
No, each licensable property requires its own licence. A landlord with a portfolio of ten small HMOs in an Additional Licensing area needs ten separate licences, each with its own application and fee. Licences are also non-transferable when the property is sold; the new owner must apply for a fresh licence. The five-year maximum term is licence-specific.
Licence application, FRA, fire-alarm design, fire doors, one team across the regime
HSE prepares the licence application pack, delivers the compliance works it requires, and maintains the 5-year evidence file. Mandatory, Additional or Selective, one team, one compliance file per property.
08 · Where to go nextTwo practical follow-ups
If you have a London portfolio and are trying to map every property against the right regime, these are the two reads that close the loop.
First, the HMO Licensing London Borough-by-Borough Guide, the 22-minute mega-article with the A-Z of all 33 boroughs, their current Mandatory / Additional / Selective regime, and their Article 4 status. Use this comparison as your framework, the borough guide as your map.
Second, subscribe to The HSE compliance briefing. One email a month covering regulatory and licensing updates. When a London borough introduces or amends a designation, you will hear it from Kevin within the week.
HSE service for this topic
HMO compliance service · fixed scope
Licence application pack, FRA, fire-alarm design, fire doors, evidence file, delivered alongside the licensing workstream by a single team.