The Housing Act 2004 ('the Act') introduced licensing for Houses in Multiple Occupation.  Most of the Act came into force on 6th  April  2006 with additional provisions relating to converted blocks of flats coming into force in 2007.

Under the Act, there are two forms of Houses in Multiple Occupation licensing:

1. Mandatory Licensing – compulsory for Houses in Multiple Occupation with three storeys or more and at least 5 persons.

2. Additional Licensing – where the local council can impose licensing on Houses in Multiple Occupation that are within their local area and which would not normally come under Houses in Multiple Occupation licensing legislation.  The council can use this power if it considers that a House in Multiple Occupation or a particular category of Houses in Multiple Occupation in a particular area, are not being managed properly and is adversely affecting the occupants of the House in Multiple Occupation or nearby properties.

If you are unsure whether or not a House in Multiple Occupation is subject to licensing, you should consult the local council.

Under the Act, a property is classed as an House in Multiple Occupation if it passes all of the following tests:

1. The Building Test– Where the building or part of the building is such that two or more of the occupants share an amenity (bathroom, toilet,  kitchen) or the building lacks an amenity or does not entirely consist of self-contained flats (whether or not there is also the sharing or lack of amenities) or is a building consisting entirely of self-contained flats and the standard of the conversion does not meet the minimum of the standards set out by the 1991 Buildings Regulations and more than one third of those flats are occupied under an Assured Shorthold Tenancy.

2. Residency Test– The property must be occupied by more than one household as their only or main residence.  If not all of the occupants are using the House in Multiple Occupation as their only or main residence but the council are satisfied that most of the occupants are, the council can serve an 'Houses in Multiple Occupation Declaration'.  This will have the effect of bringing the property under the Houses in Multiple Occupation licensing legislation.

3. More than One Household Test– A group of people who are not all members of the same family will constitute separate households. Single households consist of a single person or one or more people who are related by blood (brother, sister, mother, father (including adopted and fostered members of the family) etc) and those in a permanent relationship (husband and wife; civil partnerships; unmarried but in a long term relationship).

4. Consideration Test-  Consideration, usually in the form of rent needs to be paid for the occupation of the Property but can include employment ( for example, live staff where accommodation is provided).

Properties with a live-in landlord and not more than two other occupants are exempt from being classed as an House in Multiple Occupation.  Further exemptions are set out in Section 14 of the Act.

It is important to be aware of this legislation, as failure to register a property which is classed as a House in Multiple Occupation with the local authority is a criminal offence that can result in a fine of up to £20,000.00. and be compelled to pay back rent to your tenants.

Do Houses in Multiple Occupation require planning permission?

The April and October changes to legislation mean that from 1 October 2010 a change of use from a dwellinghouse (class C3) to a house in multiple occupation (Class C4) and from a house in multiple occupation to a dwellinghouse is possible under permitted development rights and planning applications are not needed.

The local council can, however, use its discretionary powers to exclude the permitted development rights in certain areas where it wishes to control the amount of Houses in Multiple Occupation.

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Another article on Housing in Multiple Occupation on this website is:

Buy to Let: Houses in Multiple Occupation Part II - Applying for a Licence for a House in Multiple Occupation (‘HMO’)