Newham HMO Definition: When 3 or 4 Persons Need a Licence

Three friends sharing a house in Newham don't just need a tenancy agreement — they need a property licence. Under the borough's Additional HMO Licensing scheme, any property occupied by three or four people from two or more separate households falls into the licensable HMO category, and the fees are significantly higher than a standard selective licence.

How Newham Counts Households

The Housing Act 2004 defines a "household" as members of the same family — married or cohabiting couples (including same-sex couples) and their relatives (parents, children, grandparents, siblings, step-relations). Everyone else counts as a separate household.

Three unrelated individuals sharing a house form three separate households. That triggers Additional HMO licensing. Two couples sharing a property form two separate households — also Additional HMO territory if they're from two or more households.

The critical threshold is the combination: at least three people forming at least two separate households. Below that (a single family, a couple, or two unrelated sharers), the property falls under Selective licensing instead.

Additional HMO vs Mandatory HMO

Newham's Additional HMO Licensing scheme specifically targets the three-to-four person bracket. Once the property reaches five or more persons from two or more households, it crosses into Mandatory HMO licensing under Part 2 of the Housing Act 2004 — and that applies in all 23 wards, including Royal Victoria and Stratford Olympic Park.

The Additional scheme only applies in Newham's 21 designated wards. If your property sits in Royal Victoria or Stratford Olympic Park, three or four unrelated sharers would not need an Additional HMO licence. Mandatory HMO rules still apply at the five-person threshold.

The Fee Difference

The cost gap between a Selective Licence and an Additional HMO Licence is substantial. A standard Selective Licence costs £750 total (£400 Part A, £350 Part B). An Additional HMO Licence costs £1,250 total (£400 Part A, £850 Part B).

That's a £500 difference, and it's driven entirely by the third person moving in. Landlords who allow tenants to take on an extra housemate without checking the licensing implications can find themselves operating an unlicensed HMO — an offence carrying civil penalties of up to £40,000.

Common Scenarios That Catch Landlords Out

The extra housemate. A couple rents a two-bedroom flat. They invite a friend to take the spare room. You now have three people from two households — that's an Additional HMO.

Students. Three university students sharing a private rental each count as a separate household. Full-time students are not exempt from Newham's licensing requirements; accommodation managed by a university or other higher-education institution listed under Schedule 14 of the Housing Act 2004 is exempt.

The lodger threshold. A resident landlord with up to two lodgers is exempt under Schedule 14 of the Housing Act 2004. But a resident landlord with three or more lodgers crosses into HMO licensing territory.

What Landlords Should Do

Check your property's actual occupancy — not what the tenancy agreement says, but who is actually living there. Newham's enforcement team assesses based on the reality on the ground.

If your property has three or four people from two or more households, you need an Additional HMO Licence. The application goes through the My Newham portal, and the requirements include gas safety certificates, EICR, EPC, floor plans with room dimensions in square metres, and the Fit and Proper person declaration.

Our Newham landlord licensing guide covers the full decision framework for working out which licence your property needs, with the complete document checklist and fee breakdown for each scheme.

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