TL;DR
HMO licence cost in London typically runs £500-£1,500 per property for a 5-year licence, set independently by each local council. Renewals are usually a similar fee; variation (change of circumstance) and transfer (change of ownership) cost £100-£400. Some boroughs discount for accredited landlords. Operating without the required licence triggers penalties up to £30,000 per offence plus Rent Repayment Orders.
How much is an HMO licence? The London HMO licence cost picture
London HMO licence fees are set independently by each local authority, so the answer to “how much” depends entirely on which borough the property sits in. The realistic range is £500-£1,500 for a standard mandatory HMO licence covering a 5-year term. Some inner-London boroughs sit at the top of that range; some outer-London councils sit closer to the bottom.
The HMO licence cost covers the licence itself, not associated compliance costs. A new HMO operation typically also incurs costs for an EICR, Gas Safety certificate, fire-safety equipment installation, and possibly building works to meet HMO room-size standards. Those costs are separate from the licence fee.
For whether you need an HMO licence at all — including the mandatory threshold, household definitions, and the Additional/Selective licensing schemes that catch smaller HMOs — see do I need an HMO licence?. For the broader HMO context, see our HMO licensing in London pillar guide. [S5.1 / P5 placeholders — replace when published]
HMO licence fees explained — mandatory, additional, selective
The three licensing tiers each carry their own fee structure:
Mandatory HMO licence. National rule, fee set per council. Required for any property with 5+ unrelated tenants from 2+ households sharing facilities. Typical London range: £500-£1,500 for 5 years.
Additional HMO licence. Borough-specific scheme covering smaller HMOs (often 3-4 tenants). Fee set per scheme. Typical range: £400-£1,300 for 5 years. Where Additional Licensing applies, the property requires a licence even below the mandatory threshold.
Selective licence. Borough-specific scheme covering all rented properties in designated geographic areas, regardless of HMO status. Fee set per scheme. Typical range: £350-£1,000 for 5 years. A standard family let in a Selective Licensing area requires this licence.
A property may be subject to multiple schemes (e.g. a 3-bed HMO in a Selective Licensing area would face both Additional and Selective requirements). Most councils handle this with a single combined application but separate fees per scheme.
Typical London HMO licence cost — by scheme type
| Scheme | Typical fee range (London 2026) | Validity | Notes |
|---|---|---|---|
| Mandatory HMO licence | £500-£1,500 | 5 years | Set per council; significant variance across boroughs |
| Additional HMO licence | £400-£1,300 | 5 years (typical) | Borough-specific; check council directly |
| Selective licence | £350-£1,000 | 5 years (typical) | Geographic — applies regardless of HMO status |
| Variation (change of circumstance) | £100-£300 | n/a | E.g. increase in tenant count, room change |
| Transfer (change of ownership) | £150-£400 | n/a | Required before property transfer |
| Late application penalty | Full fee + £200-£500 penalty | n/a | Plus enforcement action risk |
| Accredited landlord discount | 10-25% off licence fee | n/a | Where the council operates a scheme |
Council fee schedules are reviewed annually. Verify current fees on the relevant local authority’s licensing page before applying.
The single biggest cost mistake at HMO licensing stage is missing a scheme. A landlord who applies for a Mandatory HMO licence without checking whether the property also sits in a Selective Licensing designation can find themselves enforced against for the missing Selective licence even though the Mandatory one is in place. The check is straightforward — visit the council’s licensing page and search by postcode.
How to apply for an HMO licence
The application process varies slightly between councils but follows a consistent pattern:
- Pre-application check. Confirm the property meets HMO room-size standards, fire safety requirements, and compliance certificate currency (Gas Safety annual, EICR 5-year, EPC 10-year). Failures here delay or refuse the licence.
- Submit application. Online via the council’s licensing portal in most cases. The fee is typically split: an application portion paid upfront (often 50% of total) and a licensing portion paid on grant of the licence.
- Council consultation. The council publishes the application; neighbours and other parties can object. Consultation typically runs 28 days.
- Inspection. A council officer inspects the property to verify compliance with HMO standards. Property must be ready for inspection at this stage — incomplete fire safety installations are a common failure point.
- Decision. Approve, approve with conditions, or refuse. Approved licences are issued for up to 5 years with conditions attached (typically annual compliance reporting, maximum occupancy, fire safety maintenance).
- Appeal route. Refused or condition-disputed licences can be appealed to the First-tier Tribunal (Property Chamber) within 28 days of the decision.
The application requires evidence of compliance certificates. Click Inventories’ compliance bundle (EPC + Gas Safety + EICR) supplies all three at £320 with bundle saving. For HMOs with annual EICR requirements, the bundle integrates with the council’s audit cycle.
How long does the application take?
Total elapsed time from application to grant typically runs 8-16 weeks, with most London boroughs averaging around 12 weeks. The breakdown:
- Application processing: 1-2 weeks
- Consultation period: 28 days (legally mandated)
- Inspection scheduling: 2-4 weeks
- Decision: 1-2 weeks post-inspection
Properties can be let during the application period under specific transitional rules, but late or non-compliant applications expose the landlord to enforcement. The cleanest approach: apply at least 3 months before you intend to start letting the property as an HMO.
Renewals, variations, and refunds
Renewals. Apply 3 months before the existing licence expires. Renewal HMO licence cost is typically similar to new application fees, though some councils offer renewal discounts where the licence has been compliantly held. Missing the renewal triggers the same enforcement risk as never having applied.
Variations. A material change in the property (additional bedroom, additional tenant capacity, change of layout) requires a variation application. Variation fees are typically £100-£300 and processed in 4-8 weeks.
Transfers. Selling an HMO requires either the buyer applying for their own licence (typical) or a formal transfer of the existing licence (rarer, council-discretionary). Transfer fees £150-£400 where available.
Refunds. Most councils don’t refund fees if a licence is refused or withdrawn during processing. Some refund the licensing portion (paid on grant) if an application is withdrawn before decision; the application portion is rarely refundable.
How HMO licence fees fit into the wider compliance budget
For HMO landlords, the licence fee is typically 30-40% of the total HMO-specific compliance cost over a 5-year cycle. Other components:
- Compliance certificates (EPC + Gas Safety annual + EICR): £85-£170 per certificate, with HMO EICR often required annually rather than 5-yearly = £85-£100 in annual recurring cost
- Fire safety equipment (interlinked smoke detectors, fire doors, fire blanket, signage): £400-£1,200 setup, £100-£200 annual maintenance
- Mid-term inspections (recommended for HMOs given elevated turnover): £90 per visit at recommended 6-month cadence
- Inventory documentation (check-in + check-out per tenant change): £125-£200 per tenancy
A realistic 5-year HMO compliance budget — including the £1,000 average licence fee — runs £4,000-£7,000 per property depending on size and borough enforcement profile.
For the EICR renewal frequency under HMO rules, see how long does an EICR last. For the inspection cadence that suits HMO operations, see mid-term inspections: how often, what to check, and why. [S2.3 / S5.3 placeholders — replace when published]
Working with Click Inventories
Click Inventories supports HMO landlords across the compliance cycle: AIIC-format inventory documentation for every tenancy change, mid-term inspections on the recommended 6-month cadence, and complete compliance certificate bundles (EPC + Gas Safety + EICR with HMO-frequency renewal management).
See our compliance bundle service, mid-term inspection service, inventory clerk fees, or read about why landlords choose us.
Frequently asked questions
Are HMO licence fees tax-deductible?
Yes — HMO licence fees are typically allowable as a revenue expense against rental income for tax purposes. The treatment varies slightly depending on whether the fee covers the licence itself (deductible) or building works required to meet HMO standards (capital expenditure, treated differently). HMRC’s Property Income Manual is the authoritative reference; an accountant’s confirmation for your specific circumstances is recommended.
Can I appeal a refused HMO licence?
Yes — refused licences (or licences granted with disputed conditions) can be appealed to the First-tier Tribunal (Property Chamber) within 28 days of the council’s decision. The appeal process typically takes 3-6 months. Appeals are typically successful where the council’s decision was procedurally flawed; less commonly where the underlying compliance failure is contested.
What if I sell the HMO mid-licence?
Two routes: the buyer applies for a fresh HMO licence on completion (typical), or a formal transfer of the existing licence is applied for (rarer). Transfer applications cost £150-£400 where the council operates a transfer route. Most London councils favour fresh applications, which means the buyer effectively pays the full licence fee on top of the property cost — a factor to surface during sale negotiations.
Are renewal fees the same as new application fees?
Typically yes — most councils set renewal fees at the same level as new application fees. Some councils offer modest renewal discounts (10-15%) where the licence has been compliantly held with no enforcement during the previous term. Renewal applications should be submitted at least 3 months before the existing licence expires.
Can I get a temporary HMO licence?
Most councils do not offer “temporary” HMO licences in the strict sense. Some operate a short-term/discretionary route for landlords transitioning into compliance — typically a 12-month interim arrangement with conditions. Application terms vary substantially between councils; the gov.uk HMO licensing portal links to each council’s specific licensing page.
