Three licensing schemes + scope + which boroughs
Housing Act 2004 + Housing + Planning Act 2016 enable three property licensing schemes: (1) Mandatory HMO Licensing (Housing Act 2004 Part 2): nationwide, all UK LAs apply. Triggers 5+ unrelated occupants forming 2+ households sharing kitchen/bathroom/WC. Single-household lettings (family, single, related group) NOT licensable. 3-storey requirement removed 2018. Mandatory in all 32 London boroughs + City of London. Fee £900–£2,400 per LPA 5-year. (2) Additional HMO Licensing (Housing Act 2004 Part 2 Section 56): borough-designated, extends to smaller HMOs (3–4 occupants forming 2+ households). Borough decides via formal designation (consultation + cabinet + 12-week notice). 25+ London boroughs currently — borough-wide: Newham, Tower Hamlets, Waltham Forest, Hackney, Croydon, Brent (most wards), Barking + Dagenham, Redbridge, Bexley (parts); designated wards in Camden, Lambeth, Lewisham, Southwark, Ealing, Hounslow, Haringey, Enfield, Islington. Fee £750–£1,800 5-year. (3) Selective Licensing (Housing Act 2004 Part 3): borough-designated, ALL privately rented dwellings (not just HMO) in designated area. Designated where evidence of high PRS + low housing demand OR persistent ASB OR poor housing OR migration OR deprivation OR crime. Each borough must justify under statutory test + SoS approval for >20% borough housing or geographic. Currently in London: Newham (renewed 2023–28, borough-wide), Croydon (renewed 2024–29, ~70% borough), Waltham Forest (2020–25), Brent (renewed 2025–30), Tower Hamlets (renewed 2024–29 parts). Fee £450–£900 5-year. Conditions: similar to HMO lighter (no amenity ratio, no fire-safety beyond Smoke + CO baseline) + focus on management + ASB + property condition + tenant info. (4) HMO + Selective overlap: property in selective area that is also HMO needs HMO licence (mandatory or additional) — selective NOT required. Selective covers single-household lets + family-occupied flats that escape HMO licensing.
Conditions + cost stacking + enforcement + Builderr approach
Conditions comparison: Mandatory + Additional HMO licences typical 30–60 conditions covering amenity ([[hmo-amenity-standards-london]]) + fire-safety ([[hmo-fire-safety-compliance-london]]) + electrical ([[landlord-electrical-safety-eicr-london]]) + gas + EPC + management + tenant pack + complaints. Selective licence typical 15–30 conditions covering management + tenant pack + electrical + gas + EPC + smoke alarm + ASB management + complaints + property condition (HHSRS) + waste storage. No amenity ratio or fire-safety beyond baseline. Cost stacking example: landlord with 4 BTL flats in Newham (selective) + 2 HMOs in Tower Hamlets (additional) + 1 large HMO in Hackney (mandatory) = 4 × £600 + 2 × £1,200 + 1 × £1,850 = £6,650 per 5-year cycle = £1,330/year licensing. Plus annual gas + 5-year EICR + EPC every 10 years + annual FRA on HMOs. Annual compliance per property: £450–£950 single-let + £950–£1,800 HMO. Enforcement: civil penalties £30,000 per unlicensed property + RROs + Rogue Landlord database. LPAs actively enforce — Newham 421 prosecutions + £2.8M penalties FY 2024–25; Waltham Forest £1.4M; Croydon £1.1M; Brent £0.6M. Cross-reference HMRC for tax compliance. Triggers: (1) Tenant complaint — 65% of investigations; (2) Neighbour complaint — ASB/noise/refuse; (3) Council tax data — multiple unrelated adults at single address; (4) HMRC data share — undeclared rental income; (5) Local police intelligence; (6) Estate agent — Trading Standards report; (7) Routine LPA monitoring. Defence + mitigation: (1) Apply ASAP if discovered unlicensed — civil penalty discount on voluntary disclosure; (2) Solicitor for civil penalty appeal — 55–70% success procedural grounds; (3) Avoid prosecution route — civil penalty preferable. Builderr approach: (1) Licensing audit — desktop check addresses against borough designations + Article 4 + CA + Listed before purchase or portfolio review (£280–£540 per 5–10 properties); (2) Licence application service — online + supporting docs + inspection booking + post-inspection compliance (£480–£950 per property); (3) Compliance calendar — landlord software + 6-month + 30-day reminders; (4) Pre-purchase due diligence — licensing + Article 4 + CA + HMO saturation into investment decision (£350 per property); (5) HMO conversion design exceeding amenity + fire-safety by 10–15% = 95%+ approval + minimal conditions. See [[converting-house-to-hmo-london-planning]] + [[article-4-hmo-london-which-boroughs]].
