Islington Shared House Licence: Three Tenants, Two Households and What Triggers HMO Licensing

Three friends sign a joint tenancy for a two-bedroom flat in Islington. All three names are on one agreement, paying one rent. Surely that is a straightforward let — not an HMO? In Islington, it almost certainly is.

The Household Test, Not the Tenancy Test

The Housing Act 2004 defines an HMO based on the number of occupants and the number of separate households — not the number of tenancy agreements. Under section 258, a "household" comprises members of the same family: spouses, cohabitees, parents, children, siblings, aunts, uncles, nephews, nieces and first cousins. Everyone else counts as a separate household.

Three unrelated friends sharing a flat form three separate households. A couple and one friend form two households. Two siblings and a friend form two households. Once you reach three or more occupants from two or more households sharing facilities like a kitchen or bathroom, the property is an HMO.

Islington's Additional Licensing Catches Small HMOs

Nationally, mandatory HMO licensing only kicks in at five or more occupants from two or more households. A three-person shared flat in most boroughs would sit below that threshold and need no HMO licence.

Islington is different. The borough runs a borough-wide additional HMO licensing scheme (1 February 2026 to 31 January 2031) that captures every property with three or four occupants forming two or more households across all 17 wards. This means the three-friend flat described above needs an additional HMO licence — £900 base fee plus £100 per bedroom or letting.

Purpose-built flats are not exempt. A modern apartment let to three unrelated sharers triggers the same licensing requirement as a Victorian conversion. The scheme does not distinguish by building age or type — only by occupancy numbers and household composition.

What If It Is a Couple Plus One?

A couple and one unrelated flatmate form two households (the couple is one household, the flatmate is another). That is three occupants from two households — still captured under additional licensing.

If a couple lives alone (one household, two occupants), no HMO licence applies. A selective licence is required if the property is in one of the three Scheme 1 wards; the seven Scheme 2 wards are due to require one from 23 November 2026.

The Cost Difference Matters

A selective licence for a single-household let costs £850 flat. An additional HMO licence starts at £900 plus £100 per bedroom. For a three-bedroom shared flat, the total is £1,200 — over 40% more than a selective licence. Getting the household count wrong means applying for the wrong licence type and forfeiting the non-refundable Part A fee.

The same discount structure applies: £75 off for LLAS or NRLA accreditation, £50 off for an EPC rating of A to C, both applied at Part B.

How Tenant Changes Can Shift Your Licensing Category

A flat that starts as a single-household let (selective licence territory) can tip into HMO licensing if the tenancy roster changes. A tenant who moves in a partner creates no issue — they join the same household. But if the original tenant leaves and is replaced by an unrelated person, you may cross the two-household threshold and need a different licence type.

Landlords are required to notify Islington Council of material changes in occupancy. If the change pushes the property from selective into additional HMO territory, you will need to apply for the correct licence rather than relying on the existing one.

Our Islington Landlord Licensing Guide includes the household classification flowchart and the full fee schedule for every licence type — so you can confirm exactly which licence a shared property needs before you start the application.

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