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House in Multiple Occupation (HMO) – Definition, Overview & FAQ

What is a house in multiple occupation (HMO)?

Definition: A House in Multiple Occupation (HMO) is a rental property in which multiple individuals or households live together and share common facilities, such as kitchens and bathrooms.

HMOs are typically associated with properties that are divided into separate rental units, such as rooms or apartments, and are commonly found in urban areas where housing demand is high.

HMOs are subject to specific regulations and licensing requirements in many countries and regions. These regulations are typically in place to ensure the safety and well-being of the occupants and to prevent overcrowding or poor living conditions

Some common features and characteristics of HMOs include:

  1. Shared Facilities: Tenants usually have their own private bedrooms but share communal spaces like kitchens, bathrooms, and living rooms.
  2.  Diverse Tenant Groups: HMOs often house individuals or separate households with no familial relationship. This can include students, young professionals, or people seeking affordable housing options.
  3. Renting by the Room: Landlords rent out individual rooms within an HMO, rather than renting the entire property to a single tenant or household.

What determines whether or not a property is deemed to be an HMO?

In the United Kingdom, the criteria that determine whether or not a property is deemed an HMO are governed by specific regulations. The rules for HMOs in the UK are outlined in the Housing Act 2004, subsequent amendments, and local government regulations.

Here are the key factors that determine whether a property is considered an HMO in the UK:

  • Number of Occupants: A property is typically considered an HMO in the UK if it is occupied by three or more unrelated individuals or households who share common facilities. This is often called the “three or more persons” rule.
  • Shared Facilities: The presence of shared facilities, such as kitchens, bathrooms, or living rooms, where occupants from different households have to share these spaces, is a common characteristic of an HMO.
  • Storeys: In some cases, the number of storeys in the property may also be a factor in determining whether it’s an HMO. Specifically, if the property is a three-story building or higher and is occupied by five or more individuals or households, it is considered an HMO.
  • Separate Tenancies: If each occupant or household has a separate tenancy agreement for their portion of the property, it often indicates that the property is an HMO. This is common when landlords rent out individual rooms within a larger property.
  • Location-Specific Regulations: Local authorities in the UK may have their own additional regulations or criteria for HMOs, so it’s essential to check with the local council to understand the specific requirements in a particular area.
  • Licensing Requirements: HMOs in the UK are subject to mandatory licensing in certain cases. Mandatory licensing typically applies to larger HMOs (those with five or more occupants from two or more households) and includes safety inspections, fire safety measures, and compliance with local housing standards. Some areas may also have additional selective or additional licensing schemes.

History of HMO

The concept of a house in multiple occupations has a history that dates back several decades.

The concept of multiple individuals or households sharing a single dwelling has existed for much of the 20th century. However, the term “House in Multiple Occupations” did not come into everyday use until later years.

After World War II, there was a housing shortage in many urban areas, increasing demand for affordable housing options. This period saw the emergence of shared housing arrangements, often with several unrelated individuals or families living together in a single property.

In the United Kingdom, the term “HMO” gained prominence during the 1960s and 1970s as a result of increased concerns about overcrowded and substandard living conditions in shared housing. The Rent Acts of 1965 and 1977 included HMOs and tenant rights provisions.

The Housing Act 1985 introduced significant changes in regulating HMOs. It defined HMOs and imposed specific standards for their management and condition. This legislation aimed to improve living conditions and ensure the safety of occupants in shared housing.

The Housing Act 2004 represented a major overhaul of housing legislation, including HMO regulations. It introduced mandatory licensing for certain larger HMOs and established additional safety and management requirements. This legislation marked a significant step forward in addressing issues related to overcrowding and substandard housing conditions in HMOs.

Since the Housing Act 2004, the regulation of HMOs in the UK has continued to evolve. Local authorities have the power to introduce additional licensing schemes, and there have been ongoing efforts to improve the safety and quality of HMOs.

The concept of HMOs and similar shared housing arrangements has also been adopted and regulated in various forms in other countries around the world, especially in urban areas where housing demand is high.

HMO rules and regulations

  1. Licensing Requirements: Many jurisdictions require HMO properties to obtain a license to operate legally. Licensing typically involves meeting certain safety and management standards. The specific requirements for licensing can vary widely but may include the following:
    a. Fire safety measures, such as fire alarms, fire doors, and escape routes.
    b. Adequate heating, lighting, and ventilation.
    c. Safe electrical and gas systems.
    d. Compliance with local building codes and health standards.
    e. Regular inspections and maintenance of the property.
    f. Compliance with local zoning and land use regulations.
  2.  Occupancy Standards: Regulations often define the maximum number of occupants allowed in an HMO based on factors like the number of rooms, available facilities, and property size. These standards are in place to prevent overcrowding and ensure the safety and well-being of residents.
  3. Management and Maintenance: Landlords or property managers of HMOs are typically responsible for maintaining the property in good condition, ensuring that common areas and facilities are clean and safe, and promptly addressing any necessary repairs.
  4.  Safety Measures: HMOs are subject to various safety regulations to protect occupants. These regulations may include requirements for:
    a. Fire safety equipment, including smoke detectors and fire extinguishers.
    b. Emergency lighting and clearly marked escape routes.
    c. Gas safety inspections and certification.
    d. Electrical safety checks.
    e. Provision of safe and sanitary living conditions.
  5.  Tenant Rights: Tenants in HMOs have specific rights, including the right to a written tenancy agreement, protection from unlawful eviction, and access to common areas and facilities. Landlords must follow legal eviction procedures and provide proper notice to tenants.
  6. Local Regulations: Local authorities may impose additional regulations and requirements specific to their area. This can include zoning regulations, noise ordinances, waste disposal guidelines, and more.
  7.  Health and Safety Standards: HMO properties are often subject to health and safety regulations that require landlords to provide clean and safe living conditions. This includes addressing issues like dampness, mold, and pests promptly.
  8. Tenant Communication: Landlords are generally required to maintain open lines of communication with tenants and respond promptly to their concerns and maintenance requests.
  9.  Insurance: HMO properties’ landlords need appropriate insurance coverage, such as landlord insurance or HMO-specific insurance policies.
  10.  Tenant Screening: Landlords may be subject to rules regarding tenant screening and background checks to ensure that they are renting to suitable tenants.

Pros and cons of HMO properties


  • Higher Rental Income: One of the most significant advantages of HMO properties for landlords is the potential for higher rental income. By renting out individual rooms or units within the same property, landlords can generate more rental revenue than renting the property.
  • Lower Vacancy Rates: HMOs often have lower vacancy rates because even if one tenant moves out, the landlord can continue to receive rental income from the remaining tenants.
  • Diversified Tenant Pool: Landlords of HMOs can have a more diverse tenant pool, including students, young professionals, and individuals seeking affordable housing. This can help mitigate the risk associated with relying on a single type of tenant.
  • Shared Utility Costs: In some cases, tenants in HMOs may share utility costs, reducing the financial burden on the landlord.


  •  Higher Management and Maintenance: Managing an HMO property can be more complex and time-consuming than managing a single-family property. Landlords may need to address more maintenance issues and tenant concerns.
  • Stricter Regulations: HMO properties are often subject to stricter regulations and licensing requirements, which can vary by location. Compliance with these regulations can be costly and time-consuming.
  • Tenant Turnover: With multiple tenants, there may be more frequent tenant turnover, which can require more effort and expense in finding and screening new tenants.


How much is a HMO Licence London?

The cost of an HMO license in London can vary depending on the local authority and the property size. In London, fees for an HMO license typically range from £400 to £2,000 or more. It’s essential to check with the specific borough council where your property is located for accurate pricing.

Do I need a HMO licence for 3 tenants in London?

In London, you generally need an HMO license for properties occupied by three or more tenants from two or more households. However, rules and licensing requirements can vary by borough, so it’s crucial to verify with the local council to ensure compliance.

What is a HMO investment?

An HMO investment involves purchasing a property with multiple separate rental units, such as individual rooms, and renting them out to different tenants. It is a real estate investment strategy aiming to maximize rental income by capitalizing on the demand for shared housing, often in urban areas with high housing costs.

What are the key considerations when choosing an HMO property to invest in?

Location, property size, number of bedrooms, local demand, and proximity to amenities are essential factors to consider.

What is the typical management and maintenance involved in HMO investments?

Managing HMOs can be more time-consuming than traditional rentals. Expect responsibilities such as tenant turnover, regular maintenance, and ensuring compliance with safety regulations.

How can I screen and select suitable tenants for my HMO property?

Develop a thorough tenant screening process, including background checks, references, and interviews, to ensure tenants are a good fit for the property and compatible with other residents.

What are some common challenges associated with HMO investments?

Challenges can include tenant disputes, higher turnover rates, and the need for more hands-on management. Regulatory changes and compliance can also pose challenges.

What kind of insurance do I need for my HMO property investment?

You should get specialized landlord or HMO-specific insurance to protect your investment adequately.

How can I maximize the returns on my HMO investment?

Strategies include optimizing rental rates, minimizing vacancies, maintaining the property well, and creating a comfortable and attractive living environment for tenants.

Are there financing options available for HMO property investments?

Yes, you can explore various financing options, including Yes, you can explore various financing options, including mortgages, to fund your HMO investment. Be sure to discuss financing options with lenders who specialize in investment properties.
This depends on your preference and capacity. Many investors choose to work with property management companies to handle the day-to-day operations and tenant interactions.