The Ultimate Guide to Small HMOs: Everything you Need to Know
Definition of a Small HMO A small HMO essentially refers to a property that meets the criteria to be defined as an HMO property but does not require a mandatory HMO licence under UK regulations. These criteria include: Once a property with this criteria reaches 5 or more unrelated tenants, it is then classified as a Large HMO and therefore the landlord must obtain a mandatory HMO licence in order to operate the property. It’s worth noting that some local councils may require an additional HMO licence even for small HMOs, despite them not requiring the standard mandatory licence. However, it’s worth checking with your specific planning council on whether this applies in your local area. Large HMOs vs Small HMOs: Key Differences The key difference between Small vs Large HMOs tends to be down to the number of occupants in your HMO. As a rule of thumb, 3-4 tenants is a “Small HMO” and anything with 5+ occupants is a “Large HMO”. Our comparison table breaks this down in more detail if you’re not sure: Small HMOS Large HMOs Number of Tenants 3-4 Tenants 5+ Tenants Use Class C4 C4 – Sui Generis for 7+ occupants Mandatory Licence Required No Additional Required in some areas* Yes Planning Requirements C3 – C4: Allowed under Permitted Development Rights Article 4 directions apply C3 – C4: Allowed under Permitted Development Rights C3/C4 – Sui Generis: Planning Application required Article 4 directions apply Licence Requirements for Small HMOs The mandatory HMO licence is not required for Small HMOs as it only applies to HMOs that are 5 or more unrelated tenants. However, some areas in the UK require an additional HMO licence which can still apply to Small HMOs. The following areas in the UK have additional licencing regulations, though regulations change frequently and it’s always best to check the latest licencing rules on the appropriate council websites: London Boroughs with Additional HMO Licensing It’s worth noting that Brent did require an additional licence for all HMOs but this scheme came to an end on 31st January 2025. Major Cities & Areas with Additional HMO Licensing Room Size Requirements for Small HMOs Bathroom Requirements for Small HMOs While restrictions can vary from council to council, in general the ratio is 1 bathroom for every 4 tenants. This means that Small HMOs will require 1 bathroom with a toilet. While these are the legal requirements, we recommend more bathrooms to make life more comfortable and easier for your tenants. Property Investments UK recommends using a one-bathroom-per-three-tenants ratio. Some local councils require minimum sizes for facilities in the bathrooms, like basins and shower units. It’s worth checking with the appropriate local council to know if your Small HMO must adhere to minimum bathroom facility requirements. Kitchen Requirements for Small HMOs If you are operating a small HMO, you will need to make sure you adhere to the minimum kitchen requirements. We have detailed these in the table below. Note that this table refers to Small HMOs with less than 5 tenants. Those with 5+ tenants have different requirements: Factors Minimum Requirement Kitchen size 7m2No smaller than 1.8 metres across the narrowest area of the room Cooking facilities A 4 ring cooker, oven and grill Worktop size 2m x 0.6m Food cupboards & storage 70cm x 60cm x 50cm Sink & drainer 1 single sink with a drainer For more information, read our full article on HMO room size requirements > Bedroom Requirements for Small HMOs As a landlord, you are responsible for ensuring that your Small HMO bedroom sizes are in line with the guidelines outlined in The Housing Act 2004. When measuring up your bedrooms, you must ensure they meet the following minimum sizes: Occupancy Minimum Bedroom Size for HMO One child under the age of 10 4.64 square metres One occupant over 10 years of age 6.52 square metres Two occupants over 10 years of age 10.22 square metres Other considerations for Small HMO investment When it comes to choosing to invest in Small HMOs, there are some major things that need to be taken into account. Location Consider the location for your Small HMO. Cities with strong student, professional, or transient populations are good, as well as areas with good transport links and amenities. Cost vs Return You should consider the total cost of the property purchase, licence, conversion costs and ongoing management compared with your total expected retinal income to ensure a strong rental yield. An HMO feasibility checker can help you calculate this. Article 4 If you are looking to invest in a Small HMO in a city, it’s best to check on whether there are Article 4 directions in place before you look to invest. We have a full guide on Article 4 Directions > Finance If you are looking to finance a Small HMO, you will want to ensure you are obtaining a finance option that is most suitable for a Small HMO. Lenders offer specific HMO mortgages, so ensure you’re clued up on HMO financing >. Cost vs Return You should consider the total cost of the property purchase, licence, conversion costs and ongoing management compared with your total expected retinal income to ensure a strong rental yield. An HMO feasibility checker can help you calculate this.
Do I Need an EPC for My HMO?
Updated: March 2025 Understanding EPC Requirements for HMOs Energy Performance Certificates (EPCs) have long been an important aspect of the energy efficiency assessments for rental properties, given the insight they provide into a building’s overall energy consumption and efficiency. These certificates play an important role in ensuring the sustainability and eco-friendliness of shared living spaces. As an HMO (Houses in Multiple Occupation) landlord or investor, it is important to understand how and why compliance with HMO EPC requirements is crucial, and how this reinforces energy standards and environmental responsibility for properties in the UK. What is an EPC? An EPC, or Energy Performance Certificate, is a standardised document designed to provide information about the energy efficiency of a property. The certificate will assign a rating that grades the efficiency on a measurable scale, with A being the most efficient and G being the least efficient. You’ve probably seen EPC ratings before on home appliances like refrigerators or washing machines: The certificate also offers recommendations on how you can improve your energy performance in the property, which in turn can help you reduce overall consumption. As an HMO landlord, this is a very useful piece of information that can help you reduce utility costs as well as reduce your environmental impact. Many landlords and tenants find EPCs to be very important. According to the UK Renters Report, 48% of landlords think that EPC ratings are “extremely/very important”. This survey also suggested that 37% of tenants have used their EPC to reduce energy usage and save money. How Do I Obtain an EPC? To receive an EPC for your property, you must have an Energy Assessment Survey carried out in the property which costs £35-135 depending on the consultant. Your inspector will assess a number of factors that can impact efficiency including: EPC Requirements for HMOs Since 2008, all rental properties in England and Wales have required an EPC. However, there is confusion around the specific requirements in the case of HMOs. EPC Legal Requirements The guidance from Communities and Local Government states that “An EPC is not required for an individual room when rented out, as it is not a building or a building unit designed or altered for separate use. The whole building will require an EPC if sold or rented out.” This would mean that landlords who have an HMO with shared facilities (i.e. bathrooms, kitchens etc.) with individual tenancy agreements with their occupants do not need to provide an EPC unless the property is let as one dwelling (i.e. one contract between all tenants), or the property is converted into self-contained units. Section 21 The Deregulation Act makes it unlawful to serve a Section 21 Notice in England for any tenancies that started after October 2015 without an Energy Performance Certificates (EPC), and the EPC and a gas safety certificate. However, as of 2024 it looks like the Labour government will be banning Section 21 evictions for good. As much of the legislation around this is muddy at best, landlords may be inclined to just obtain an EPC as it only costs between £50 – £80 and lasts for 10 years. However, for those with older, large properties, as many HMOs are, this can complicate things when it comes to rating compliance. Selling & Buying HMOs Another consideration for EPC requirements is in the instance of selling or buying an HMO property. The guidance states that all domestic properties must have an EPC to be sold. Therefore, if you are planning on selling or buying an HMO, this is a factor to consider. New EPC Requirements 2030 The current EPC regulations for rental properties, which have been around since 2018, set out that all properties let out to tenants must have an EPC rating of at least band E. These rules have to be compiled before the property is rented out, meaning that any that don’t comply can be landed with a fine up to £30,000. One of the main proposed EPC chances for 2030 is the introduction of a stricter minimum energy efficiency rating for rentals. This change states that properties, both existing and new, were proposed to require a rating of at least band C from 2028, in line with the UK governments’ net-zero target. However, the Labour government pushed this target back to 2030. Originally, the plan was to ensure all new tenancies were in bands A-C by 2025. However, after much lobbying and argument from landlords, the 2025 and 2028 deadlines were scrapped and we are now looking at this being brought into effect in 2030. How Does this Impact HMOs? At the moment, the way that the changes could affect HMOs is not 100% clear and more changes could still be on the horizon. However, based on current legislation, if you are operating an HMO that has self-contained flats, or are renting out your HMO property under one agreement, it is likely that the EPC requirements will affect you. Furthermore, if you are operating an HMO and have decidedly obtained an EPC for one reason or another, this means that your certificate must be C or higher from 2030.