Additional vs Selective vs Mandatory HMO Licensing in England

England has three types of property licensing, and they overlap. A single property can sit in an area where all three schemes are in force, but it only needs one licence — the hierarchy determines which. Getting the wrong one, or assuming you need none because your property is "too small," is one of the most common licensing mistakes landlords make.

The Three Schemes

Mandatory HMO Licensing (Part 2, Section 55)

This is the national scheme. It applies across England wherever a property meets the statutory test, subject to specified exemptions. A property needs a mandatory HMO licence if it is occupied by five or more people forming two or more separate households who share at least one basic amenity (kitchen, bathroom, or toilet), or where one or more basic amenities are lacking.

The threshold is not tied to property size, number of storeys, or location. The property must still meet a statutory HMO test. The old three-storey rule was abolished in October 2018.

Additional HMO Licensing (Part 2, Section 56)

Councils can designate additional licensing schemes for HMOs that fall below the mandatory threshold — typically properties occupied by three or four people from two or more households who share facilities. Some schemes also capture Section 257 HMOs (converted buildings).

Additional licensing is not national. Each council decides whether to run a scheme, which property types it covers, and which geographic areas it applies to. Some councils designate their entire area (Birmingham is citywide); others target specific wards.

A scheme lasts a maximum of five years under Section 60, after which the council must renew it through a fresh public consultation. If the designation lapses, existing licences run to their expiry but no new applications are required until a new designation is confirmed.

Selective Licensing (Part 3, Section 80)

Selective licensing targets all privately rented properties in designated areas, regardless of whether they are HMOs. A single-family let in a selective licensing ward needs a licence even though only one household lives there.

Councils introduce selective licensing to tackle specific problems: low housing demand, significant anti-social behaviour, poor property conditions, or high levels of migration, deprivation, or crime. Like additional licensing, it is geographically limited and lasts a maximum of five years.

The Hierarchy

When multiple schemes overlap in the same area, this strict hierarchy determines which licence the property needs:

1. Mandatory HMO supersedes everything. If the property meets the five-person, two-household test, it gets a mandatory licence — no matter what other schemes are running in the area.

2. Additional HMO takes priority over selective. A three-person shared house in an area with both additional and selective licensing gets an additional HMO licence, not a selective one.

3. Selective applies to properties that do not qualify for either HMO scheme — typically single-family lets.

A property cannot hold two licences. The hierarchy prevents double licensing.

Practical Examples

A five-bedroom shared house with six tenants from five households in a selective licensing ward: mandatory HMO licence. The selective scheme is irrelevant because the property exceeds the mandatory threshold.

A three-bedroom house with three unrelated tenants in an area with additional licensing: additional HMO licence. Three people from three households sharing a kitchen = an HMO below the mandatory threshold but caught by the additional scheme.

A two-bedroom flat let to a couple (one household) in a selective licensing ward: selective licence. It is not an HMO at all — one household — but the area designation requires it.

A three-bedroom house with three unrelated tenants in an area with NO additional or selective scheme: no licence required. The property is an HMO (three people, three households, shared facilities), but it falls below the mandatory threshold and no discretionary scheme covers it.

Fee Differences

Fees vary between scheme types and between councils:

Mandatory licences are generally the most expensive because they carry the heaviest enforcement and inspection obligations. Selective licences tend to be cheaper but still carry non-refundable Part A fees.

How to Check Which Scheme Applies

1. Count your occupants and households — five or more people from two or more households sharing amenities means mandatory, full stop
2. If below the mandatory threshold: check your council's website for additional licensing — is there an active designation covering your property type and ward?
3. If no additional scheme applies: check for selective licensing — is there an active designation covering your postcode?
4. If neither discretionary scheme covers your property: no licence is required (though other housing standards still apply)

Do not rely on assumptions about your council. Schemes are introduced, renewed, and sometimes allowed to lapse. Check the council's current licensing pages and confirm the designation dates.

Our HMO Licensing Guide for England covers all three schemes in detail — the thresholds, the application process, and the fees — so you can identify the right licence for your property and apply correctly the first time.

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