Your landlord could owe you up to two years of rent back — and most renters sharing a house in London have no idea the law now allows it. Rent Repayment Orders for unlicensed HMOs doubled from 12 to 24 months under the Renters’ Rights Act, at the same moment Camden, Islington, Hackney and Croydon all switched on or renewed licensing schemes covering thousands more shared houses. This guide explains what actually makes a property an HMO, what a licence is legally required to guarantee you, and what renters and landlords both need to check before the rules catch them out.
What Actually Makes a Property an HMO
A House in Multiple Occupation is any property let to three or more people from more than one household who share a toilet, bathroom or kitchen (Housing Act 2004, Part 2). That single definition covers a huge share of London’s shared housing — a five-bed Victorian conversion let room by room, a converted office above a shop, three friends renting a two-bed together with the box room let separately. Most tenants living this arrangement have no idea the classification exists, let alone that it comes with its own licence, safety standards and legal protections separate from an ordinary tenancy.
The licence exists because shared houses carry genuinely different risks from a single-family let — more occupants per fire escape route, more shared kitchen appliances, more turnover of who’s actually living there at any given time. Licensing is the council’s mechanism for inspecting and enforcing against the landlords who cut corners on exactly those risks.
Working out whether your own house counts is simpler than the legal definition makes it sound. Ask yourself three things: are there three or more tenants living there, do they come from at least two separate households — flatmates who answered separate adverts, not a couple or family renting together — and do you share a kitchen or bathroom rather than each having your own. Answer yes to all three and you’re in an HMO, whatever the tenancy agreement calls it and regardless of whether your landlord has ever mentioned the word.
The Three Licensing Tiers, and What Each Requires
Not every HMO needs the same licence, and the tier depends on size and location rather than the type of tenancy agreement in use.
| Tier | Applies to | Who requires it |
|---|---|---|
| Mandatory | Any HMO with 5+ occupants from 2+ households, regardless of storeys | Nationwide — set by central government |
| Additional | Smaller HMOs, typically 3–4 occupants, at a council’s discretion | Individual boroughs, scheme by scheme |
| Selective | All private rented properties in a designated area, HMO or not | Individual boroughs, usually targeting anti-social behaviour or poor conditions |
A property can need more than one licence type simultaneously if it sits inside both an additional and a selective scheme — which is increasingly common in inner London boroughs running both at once. Checking which tiers apply to a specific address is a five-minute job on the relevant council’s licensing register, and it’s worth doing before you sign anything, not after a problem shows up.
London’s 2026 Licensing Rollout, Borough by Borough
2026 has been a genuinely active year for licensing expansion, and the pace matters if you’re renting or letting in one of these boroughs specifically. Camden renewed its additional licensing scheme in December 2025. Islington went borough-wide with additional licensing in February 2026 — meaning HMOs that previously fell outside any scheme now need a licence regardless of address within the borough. Hackney switched on borough-wide additional licensing alongside a 17-ward selective licensing scheme in May 2026, one of the most comprehensive rollouts in London this year. Croydon is scheduled to follow in September 2026.
The fees vary sharply by council and are not trivial. Expect £900 to £2,000-plus per property in most boroughs running additional or mandatory schemes — Lambeth is the outlier worth knowing about, charging £550 per room rather than per property, which changes the maths considerably for a five- or six-bed HMO. A landlord letting across two or three of these boroughs cannot assume one borough’s rules or fees transfer to another; each scheme is set, priced and renewed independently.
Minimum Room Sizes: The Law Most Renters Have Never Heard Of
Since October 2018, every mandatory HMO licence comes with legally binding minimum room sizes, measured at a ceiling height of 1.5 metres or more:
- A room let to one person aged 10 or over must be at least 6.51m².
- A room let to two people aged 10 or over must be at least 10.22m².
- A room occupied by a child under 10 must be at least 4.64m².
Here’s what agents rarely volunteer: a listing advertised as a “double room” in a converted Victorian house is routinely closer to the 10.22m² legal floor than to a room genuinely built for two adults to live comfortably. Measure before you commit — a room a few centimetres under the legal minimum doesn’t trigger an automatic flag anywhere; it only becomes a problem if a tenant or inspector raises it. If your room falls short, the council’s licensing team can require the landlord to reduce occupancy or lose the licence entirely, which is real leverage a renter can use.
How the Renters’ Rights Act Changed Room-Lets Inside HMOs
The Renters’ Rights Act’s biggest structural change lands directly inside shared houses. From 1 May 2026, every individual tenancy — including a single room let inside an HMO — became an Assured Periodic Tenancy. Fixed-term agreements can no longer be created at all, for any room in any HMO, going forward.
In practice, this ends the old pattern where a room-only tenant signed a rolling six- or twelve-month fixed term with limited ability to leave early, while facing a no-fault eviction the moment the landlord wanted the room back. Periodic tenancies work in both directions: a tenant can generally leave with proper notice without being locked into a fixed end date, and a landlord can only end the tenancy on the specific grounds the Act now requires, not simply because the fixed term expired. For a house full of tenants on different move-in dates — the normal pattern in room-by-room HMO lettings — this is a bigger shift than most coverage of the Act acknowledges, because it applies room by room rather than to the property as a whole.
If Your HMO Isn’t Licensed: Rent Repayment Orders Explained
This is the part with real money attached. If a property should be licensed and isn’t, a tenant can apply to the First-tier Tribunal for a Rent Repayment Order — and the Renters’ Rights Act extended the maximum claim from 12 to 24 months of rent paid during the unlicensed period, alongside a matching extension of the application deadline.
Run the numbers on what that means at London’s average room rent of £978 a month (SpareRoom Rental Index, Q1 2026): 24 months of rent paid into an unlicensed HMO is theoretically up to £23,472 recoverable, though the Tribunal decides the actual award and does not guarantee the full amount. The process itself is straightforward in outline — check the property against the council’s public licensing register, gather your tenancy agreement and payment records, and apply directly to the Tribunal, which does not require a solicitor. What it is not is automatic or fast; treat this as leverage and a genuine remedy, not a certainty. Tribunals weigh the landlord’s conduct and financial circumstances alongside the unlicensed period itself, so a landlord who applied for a licence and is waiting on a slow council backlog is treated very differently from one who never applied at all — the record of what you did and when matters as much as the fact of non-payment.
What Landlords Must Budget For Before Converting to an HMO
The economics of an HMO conversion have tightened considerably, and several costs stack in ways that catch landlords who last checked the rules more than a year or two ago.
Licensing fees alone now run into four figures per property in most inner-London boroughs, and Lambeth’s per-room structure means a larger HMO there costs proportionally more than a smaller one — the opposite of the flat per-property fee most other boroughs charge. Room-size compliance can cost a bedroom entirely: a five-bed conversion with one undersized box room either loses that room from the licensed occupancy or requires structural changes to reach 6.51m², and either outcome changes the rental income the conversion was built around. Add the £40,000 maximum penalty for operating unlicensed, and the up-to-24-month Rent Repayment Order exposure, and the honest position is that marginal HMO conversions — the ones that only worked financially on the old fee and penalty structure — no longer pencil out the way they did three years ago. Before converting, check your specific borough’s current scheme and fee directly; do not rely on a neighbouring borough’s rules as a proxy, because the schemes are set independently and change on their own renewal cycles. The wider compliance picture beyond HMOs specifically — deposits, notices, pets — sits in our summary of Renters’ Rights Act obligations for London landlords, and the tax treatment of licensing fees and any structural room-size works is covered in our London landlord tax guide.
What Renters and Landlords Need to Do Now
- Renters: check any HMO address against the relevant council’s public licensing register before signing — it takes five minutes and tells you whether a Rent Repayment Order is even on the table if something goes wrong later.
- Renters: measure your room. A “double” under 10.22m² or a single under 6.51m² is a genuine compliance issue, not just an inconvenience.
- Landlords: confirm which licensing tier — or tiers — apply to each property individually; Camden, Islington, Hackney and Croydon have all changed their schemes within the past twelve months.
- Landlords: budget licensing fees, potential room-size losses and penalty exposure together, not separately, before committing to a conversion.
- Both: remember every room-let is now an Assured Periodic Tenancy from 1 May 2026 onward — fixed terms inside HMOs are gone for good.
If you’re weighing an HMO room against the other shared-living options in London, our comparisons of the real cost of renting alone vs sharing and co-living compared with a traditional flatshare cover the other two models this guide doesn’t.
List or Find a Compliant Room — FTR London
Landlords: a correctly licensed HMO with accurately measured rooms is a genuine selling point to increasingly informed tenants. List your property on FTR London with your licensing status confirmed, and reach renters who now know exactly what to check.
Renters: browse room and flatshare listings on FTR London, and use the checklist above before you commit to any shared house — a licensed HMO with correctly sized rooms is worth more to you than a slightly cheaper one that isn’t.
