HMO licensing in Newham

An HMO is a house in multiple occupation. The legal test under section 254 of the Housing Act 2004 is that at least three tenants live in the property, they form more than one household, and they share a toilet, bathroom or kitchen.

A household is one person, a couple, or a family living together. Three friends sharing a flat are three households. A couple plus their two children are one household. The household count is what triggers the HMO definition, not just the headcount.

A self-contained flat where everyone shares a single tenancy and uses one kitchen and bathroom inside the flat is not an HMO. A house split into self-contained flats can still be an HMO at the building level if a single tenancy covers the whole property.

Mandatory HMO licensing is national law. Every council in England runs it, including Newham. A property needs a mandatory HMO licence when five or more people from two or more households live in it and share a toilet, bathroom or kitchen.

The rule sits in the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018. There is no postcode test. If the property meets the headcount and household test anywhere in England, it needs a licence from the local council.

The licence has to be in place before the tenancy starts. Renting out an unlicensed mandatory HMO is a criminal offence. Councils can prosecute or apply a civil penalty of up to £40,000 per offence, and tenants can apply for a rent repayment order of up to 12 months of rent already paid.

Additional HMO licensing is a discretionary scheme. A council uses it to catch smaller shared homes that fall below the mandatory threshold. The rules sit in Part 2 of the Housing Act 2004 and the scheme has to be formally designated by the council.

Newham runs an active additional HMO licensing scheme. The detail below is taken from the council's own designation notice.

Newham assesses every HMO licence application against statutory standards and the council's own published amenity rules. The application is not a paperwork exercise. Most councils inspect before issuing the first licence, and refusals are common where the property does not meet the standard.

Room sizes. The Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018 set minimum sleeping room sizes: 6.51 m² for a single adult, 10.22 m² for two adults, and 4.64 m² for a child under ten. A bedroom that does not meet the minimum cannot count as a let room on the licence.

Bathrooms and kitchens. Councils typically require one bathroom per five occupiers and a kitchen sized for the number of households sharing it. Newham's exact amenity standard is published with the application pack and is enforced as a licence condition.

Fire safety. Interlinked smoke alarms on every storey, a heat alarm in the kitchen, fire doors on every habitable room (FD30 typically), and a clear protected escape route. A fire risk assessment under the Regulatory Reform (Fire Safety) Order 2005 is the landlord's responsibility and the council can ask for the assessment at any time.

Gas, electrical and energy. An annual gas safety certificate (if there is a gas supply), an EICR no more than five years old, and an Energy Performance Certificate of E or above for the property to be let lawfully under the Minimum Energy Efficiency Standard regulations.

Converting a family home to an HMO is a change of use from Class C3 (dwellinghouse) to Class C4 (small HMO, up to six occupiers) or a sui generis HMO (seven or more). Outside areas covered by an Article 4 direction, the C3 to C4 change is permitted development and no planning application is needed. The HMO licence is a separate process either way.

Newham may have an Article 4 direction that removes the permitted development right for HMO conversion in part or all of the borough. Where that applies, a planning application is required before the HMO can operate. The licence application then sits on top of the planning permission. Check the council's planning portal for current Article 4 areas before buying a property to convert.

Conversion to seven or more occupiers always needs a planning application as a sui generis HMO, regardless of whether an Article 4 direction is in force.

A standard buy-to-let mortgage does not normally permit HMO letting. Lending against an HMO needs an HMO mortgage product, often at a higher rate and with stricter loan-to-value caps. Lenders ask to see the HMO licence reference at completion and at renewal. Letting an unlicensed HMO breaches the mortgage conditions and can trigger a default.

Landlord insurance for an HMO is priced separately from single-let insurance. Cover for malicious damage, loss of rent, and public liability scales with occupier count. Insurers can refuse a claim where the property should have been licensed and was not, so the licence number goes on the policy schedule.

For overseas owners, Newham also expects a UK-based managing agent named on the licence application. The agent's address has to be a real correspondence address, not a virtual office, so the council can serve notices.

Newham runs a selective licensing scheme alongside HMO licensing. A property only needs one licence at a time. If the property is an HMO under either the mandatory test or the council's additional scheme, that takes priority. Apply for the HMO licence and the selective licence is not needed at the same address.

The practical edge case is a property that starts as a single-household let inside a selective area, then converts to a small house share. The licence type has to change at that point and the council needs a new application.

Applications go to the council. Newham asks for the property address, the landlord and any agent's details, a floor plan, an Energy Performance Certificate, a current gas safety certificate, a current electrical safety report, and the fee.

The council assesses the application against HMO management regulations. The property has to meet room-size rules, fire-safety standards, and the council's HMO amenity standards on bathrooms, kitchens, and fire doors. Most councils inspect before issuing.

A licence usually lasts five years. It is tied to the named licence holder and the named property. Sell the property, change the manager, or change the number of occupiers above the licence and the licence has to be updated or re-applied for.

Renting out an unlicensed HMO is a criminal offence under section 72 of the Housing Act 2004. The council can prosecute, or it can apply a civil penalty of up to £40,000 per offence and skip court.

Tenants of an unlicensed HMO can apply to the First-tier Tribunal for a rent repayment order of up to 12 months of rent. Universal Credit paid for the same period can also be reclaimed.

A landlord cannot serve a valid section 21 notice on a tenant of a property that should have an HMO licence but does not. That blocks no-fault eviction until the licence is in place.