A landlord's guide to houses in multiple occupation (HMO)
This guide is for informational purposes only. We do not currently offer HMO landlord insurance at MoneySuperMarket.
Key takeaways
An HMO is a property rented out by three or more unrelated people forming more than one household who share common facilities like a kitchen, toilet or bathroom.
HMOs can be profitable as rent is charged per tenant, per room (bills are usually included) but they require more management due to higher tenant turnover and stricter health and safety standards.
You will need specialist landlord insurance for an HMO.
What is a house in multiple occupation (HMO)?
A house in multiple occupation (HMO) refers to a property let to at least three people from different ‘households’.
A household consists of either a single person or members of the same family who live together. It includes people who are married or living together.
In an HMO, tenants are not from one 'household' but share facilities like the bathroom and kitchen. Examples include student houses and young professional house-shares.
Various properties can qualify as HMOs. These include large, converted houses and flats with three or more bedrooms.
What is a large HMO?
If you have at least five tenants from different households with shared communal areas in your rental property it’s considered a large HMO. Large HMOs require a licence from your local council.
How is an HMO different to a single let?
Typically, each tenant will have their own tenancy agreement and own bedroom with an HMO. This is in contrast to a ‘single let’ where the property will be let on one tenancy contract covering all rooms and tenants.
Landlords of HMOs must meet stricter safety and management standards than those required for non-HMO rental properties.
Should I invest in HMOs as a landlord?
HMOs may generate higher rental yields than single let properties because:
Bedrooms are let on a per-room basis. The combined rent from several bedrooms will usually be higher than the rental income possible by letting the property as a single let
There is less risk of void periods with a HMO as even if one tenant moves out and a replacement needs to be found, there will still be rental income from the other rooms
In areas with high demand for accommodation, HMOs can be a popular choice, as they cater to various needs, such as students, young professionals, and those seeking shared living arrangements.
How does the Renters’ Rights Act affect me as an HMO landlord?
The Renters’ Right Act, which took effect from 1 May 2026, brings a number of important changes for HMO landlords in England. It means:
Higher risk of vacancies: Tenants no longer have a fixed-term contract and can leave at any time with two months’ notice. For HMO landlords with student accommodation this could mean vacancies during an academic term or the summer holidays.
New eviction rules: You can no longer issue a Section 21 notice (i.e. a no-fault eviction) if you want a tenant to leave. Instead, you’ll need to demonstrate specific grounds for eviction. However, you can regain possession of a student HMO to align with the academic year, provided you give four months’ notice.
No annual or termly rents in advance: You can now only get one month's rent in advance.
Fewer rent increases: You can only raise rent once per year, even if you’re experiencing increased costs. If the tenant believes the increase is above market rate they can challenge it by applying to the First-tier Tribunal.
Tighter regulation: At a later phase you will need to take action to address hazards, such as damp and mould, within a specified time period. This rule already applied to social housing but has been extended to all private rentals. If you don’t comply, tenants could take court action.
📣 Did you know? About three million people live in shared housing across the UK, according to HMO management platform COHO’s The Future of HMOs 2025 report.
What mortgage do I need as an HMO landlord?
You will usually need a specialist HMO mortgage to buy a property to let as an HMO. Most buy-to-let mortgages require the landlord to let the property as a single let on an assured periodic tenancy or ‘rolling tenancy’, under the new Renters’ Rights Act, which took effect on 1 May 2026.
A specialist HMO mortgage may require a larger deposit than a standard HMO mortgage. HMO landlords will be taxed on the rental income from an HMO in line with the current BTL tax regime.
Do I need an HMO licence?
Yes, if you have a large HMO (a property occupied by five or more people forming three or more households) in England or Wales you will need an HMO licence from your local council.
However, you may still need a licence if you have three or four tenants from different households as local authorities can include other types of HMOs for licensing via the ‘selective licensing’ scheme or additional licensing. This was introduced by the Housing Act 2004 and gives local authorities the power to require landlords to obtain a licence for certain privately rented properties within a designated area.
Licensing schemes can apply regardless of the number of storeys in the property.
How much does an HMO licence cost?
Licences require a fee which will be confirmed on application – the fee can vary between local authorities and you’ll need a separate licence for each HMO you run. Properties are required to meet minimum standards to get a licence.
What happens if I don’t get an HMO licence?
It is a criminal offence to operate an HMO without a licence, if it’s required. If you let an HMO without a licence, you could receive an unlimited fine. Other penalties may include rent repayment orders or a criminal conviction.
How is being an HMO landlord different to being a single-let landlord?
The management and maintenance of HMOs is very different to letting a property to one household. HMOs require more hands-on involvement.
More tenant issues
HMO landlords may be required to deal with more tenant issues than they would with a single let. Letting rooms to people who don’t know each other can lead to conflict - having house rules in place can help.
Bills included in rent
It is standard practise for HMO landlords to include bills such as energy, water, council tax, and broadband in the rent. This means the landlord will need to hold accounts for these services in their name and ensure bills are paid on time.
Landlords can use technology to manage rent payments, bill payments, safety inspections and other HMO administration.
Higher tenant turnover
The demographics and turnover rates of tenants in HMOs differ from those in single let properties. HMOs typically attract students, young professionals, or short-term tenants on low incomes. This can result in a higher tenant turnover.
To make a profit, landlords should research the local housing market to make sure there is sufficient demand for HMOs. Areas with students, young professionals and low income workers typically have high demand for HMOs.
It’s vital to understand the work involved in managing a HMO when choosing a HMO as a BTL property.
What are the legal requirements for HMOs?
Landlords must ensure:
The property is licensed (as above) and licensing conditions are met.
The property is not overcrowded.
There are adequate cooking and washing facilities.
Fire safety measures are in place (e.g. fire doors, alarms, extinguishers).
Rooms meet minimum size requirements.
Regular electrical safety checks (every 5 years).
There is an up-do-date Energy Performance Certificate (EPC).
A Gas Safe registered engineer does an annual gas safety check on each appliance and flue and a copy of the gas safety certificate is given to the tenant before they move in or within 28 days of the check.
Check GOV.UK for a full list of requirements or consult a letting agent.
What are the property standards for HMOs?
HMO properties must adhere to specific standards for multiple occupants. These include:
Minimum room sizes
Each bedroom in an HMO must be large enough for the occupant.
The Government requires single rooms to be no smaller than 6.51 square metres. Double rooms for two people should be at least 10.22 square metres. However, local authorities can set their own minimum room sizes.
Facilities and amenities
HMOs need adequate cooking and washing facilities for tenants. This includes a sufficient number of bathrooms and kitchens. All occupants must have reasonable access to these facilities.
Health and safety standards
Landlords must ensure all HMOs meet strict health and safety regulations.
This includes installing and maintaining smoke alarms. Safe appliances must be provided. All electrical and gas equipment must be regularly checked and certified by professionals.
Additionally, fire safety measures like clear escape routes and fire doors are mandatory, and you may need evidence of a fire safety risk assessment.
There also needs to be proper waste disposal.
What landlord insurance do I need for an HMO?
Standard landlord insurance may not cover an HMO. Instead you will need specialist insurance to cover the specific risks that apply to HMOs. Look for policies that protect the building itself and related risks such as injury or loss suffered by a tenant.
HMO landlords should also look at landlord home emergency insurance.
💡 Top tip: Landlord insurance may be required by your local authority in order to get a licence.
What are the pros and cons of being an HMO landlord?
Pros:
Higher rental yields.
Reduced void periods.
Steady cash flow.
Popular in student towns and urban areas.
Cons:
Higher startup costs.
More management required.
Strict legal compliance.
Greater tenant turnover.
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