Additional Licensing Is Spreading Fast — Is Your HMO Now Covered?

Three Licensing Regimes, One Property, Zero Margin for Error

Most landlords I speak to understand mandatory licensing. Five or more people, two or more households, one shared kitchen or bathroom — you need a licence, full stop. That's national, non-discretionary, and has been since 2018.

What catches people out is everything sitting below that threshold.

Additional licensing is discretionary. Councils choose to introduce it, and when they do, it pulls in the 3- and 4-person HMOs that mandatory licensing ignores. Selective licensing goes further — every private rented property in a designated area, regardless of occupancy type, needs a licence.

Here's the part that genuinely surprises landlords: all three regimes can apply to a single property simultaneously. You could legally need a mandatory licence, an additional licence, and a selective licence for the same address. Each has its own application, its own fee, and its own conditions. Miss one and you're operating unlicensed — which carries an unlimited fine and, under the Housing Act 2004, exposes you to a rent repayment order covering up to 12 months of rent.

Why 2026 Is the Year Everything Changed

The trigger was quiet and bureaucratic, which is why most landlords missed it entirely.

In December 2024, the government published the Selective Licensing General Approval 2024. The headline change: the old rule that capped selective licensing designations at covering no more than 20% of a council's housing stock was removed. Councils no longer need central government sign-off to designate large areas. They can move — and in 2026, they have been moving fast.

RealYield reported in July 2026 that over 70 English councils now operate additional HMO licensing schemes. That figure includes Bristol, Nottingham, Brighton & Hove, Liverpool, Sheffield, Oxford, Salford, Waltham Forest, and Havering — a mix of university cities, post-industrial towns, and outer London boroughs that tells you this isn't a metropolitan-only story.

Oxford City Council approved a new additional licensing designation on 18 March 2026. That's a council that already had significant HMO stock, adding a new layer of coverage for smaller properties. It won't be the last.

The pace of expansion in 2026 is the fastest since additional licensing was first introduced. The removal of the area cap has essentially handed councils a blank cheque, and plenty of them are cashing it.

How to Know If Your HMO Is Newly Caught

Checking your licensing position isn't complicated, but it does require you to check the right things in the right order.

Start with mandatory. Five or more people from two or more households? You need a mandatory licence from your council's private sector housing team. This applies nationally — no local variation.

Then check for additional licensing. This is where you need to go to your specific council's website and search for their HMO licensing page. Look for whether an additional licensing designation is in force, what the designated area covers (it's often ward-by-ward, not borough-wide), and when it was approved. Designations must be published and have a start date — if your property falls within the designated area after that date, you need to apply.

Then check for selective licensing. Even if you run a single-tenancy flat, if the area has a selective licensing scheme, you're caught. Again, council-specific, area-specific, date-specific.

The honest problem with this process is that council websites are inconsistent. Some publish clear interactive maps. Others bury licensing information across multiple PDFs. A few councils I've looked at have approved new designations without prominently updating their main HMO page — which means a landlord doing a quick check could miss a live scheme.

This is exactly why address-level data matters. Checking by postcode against a consolidated source is faster and less likely to produce a false negative than navigating 70+ individual council websites.

The Compliance Cost No One Budgets For

Additional licensing fees vary significantly by council. In practice, most sit between £500 and £1,200 per property for a 5-year licence — but that range understates the variance. Some London boroughs charge closer to £1,500, and fees are rising as councils treat licensing income as a revenue stream.

If you hold 5 properties across two councils that have both introduced additional licensing in 2026, you could be looking at £5,000–£7,500 in licence fees you hadn't budgeted for. That's before any compliance works required as a condition of the licence — fire doors, interlinked alarms, room-size requirements that weren't enforced before.

I'm not saying don't licence. Licensing, done properly, creates a more professional private rented sector and — if I'm honest — weeds out the landlords who've been cutting corners. But the financial hit is real, and it lands hardest on smaller portfolios where cashflow is already tight.

If you're buying an HMO in 2026, build licensing fees into your acquisition costs. If you're holding, audit your portfolio against the current designation maps now — not when a council enforcement officer knocks.

The landlords who get caught by additional licensing in 2026 won't be the ones who ignored the rules. They'll be the ones who checked their compliance position two years ago and assumed nothing had changed. Councils are designating new schemes faster than most landlords are reviewing their portfolios. That gap — between the pace of regulation and the pace of landlord attention — is where enforcement actions are born. Check your address. Check it now.