If you’re a landlord or property investor asking “Do I need an HMO licence for 3 tenants in London?”, you’re not alone. It’s one of the most common—and most misunderstood—questions in the London rental market. The short answer is: sometimes yes, sometimes no, and the difference can have serious legal and financial consequences. Let’s break it down clearly, so you can stay compliant, protect your income, and rent with confidence.
What is an HMO?
An HMO (House in Multiple Occupation) is a property rented by two or more households who share facilities such as a kitchen or bathroom. A “household” usually means a single person, a couple, or a family living together.
So, if you rent your property to three unrelated tenants, it does qualify as an HMO. The real question is whether it needs to be licensed.
Mandatory HMO Licensing: The National Rule
Under England-wide regulations, mandatory HMO licensing only applies if:
- The property is rented to 5 or more people
- They form 2 or more households
- They share facilities
This means that a property with just 3 tenants does NOT require a mandatory HMO licence under national law.
At this point, many landlords breathe a sigh of relief—but don’t stop reading just yet.
The London Twist: Additional Licensing Schemes
Here’s where London is different.
Many London boroughs operate Additional HMO Licensing schemes, which go beyond national rules. These schemes often require a licence for:
- Properties with 3 or more tenants
- Smaller shared homes and converted flats
- HMOs not covered by mandatory licensing
In other words, even with only three tenants, you may still need an HMO licence depending on the borough your property is in.
Each London council sets its own rules, and they change over time. One borough may require licensing for all shared properties, while a neighbouring borough may not.
What Happens If You Get It Wrong?
Failing to license a property that requires one can be costly:
- Fines of up to £30,000
- Rent Repayment Orders (up to 12 months’ rent returned)
- Difficulty evicting tenants using Section 21
- Damage to your reputation and investment returns
For professional landlords, compliance isn’t just about avoiding penalties—it’s about protecting long-term profitability.
How to Check If You Need a Licence
To be 100% certain, you should:
- Identify the local council where your property is located
- Check their Additional HMO Licensing policy
- Confirm whether 3-person HMOs are included
- Review minimum room sizes, safety standards, and licence conditions
Because London regulations are complex and constantly evolving, many landlords choose professional support rather than risk a mistake.
Turning Compliance into an Opportunity
While licensing may feel like red tape, it can actually increase property value, improve tenant quality, and reduce long-term issues when managed correctly. Well-run HMOs often outperform single-let properties—especially in high-demand London areas.
This is where expert hmo management london services can make a real difference, handling licensing, compliance, tenant management, and inspections while maximising rental income.
Final Verdict
So, do you need an HMO licence for 3 tenants in London?
- Not under mandatory national rules
- Possibly under local borough additional licensing
The key takeaway: Always check your local council requirements before letting the property.
If you want peace of mind, faster compliance, and stronger returns, getting professional advice early can save you time, stress, and money—while keeping your London property fully compliant and profitable.