Property Licence

Merton licensing / HMO licensing

HMO licensing in Merton

Mandatory HMO (national)
Additional HMO active in Merton

HMO licensing in Merton comes from two places. National law sets the mandatory HMO rule for larger shared homes. The council can add its own additional HMO scheme on top, which catches smaller shared homes in part or all of its area.

What counts as an HMO

An HMO is a house in multiple occupation. The legal test under section 254 of the Housing Act 2004 is that at least three tenants live in the property, they form more than one household, and they share a toilet, bathroom or kitchen.

A household is one person, a couple, or a family living together. Three friends sharing a flat are three households. A couple plus their two children are one household. The household count is what triggers the HMO definition, not just the headcount.

A self-contained flat where everyone shares a single tenancy and uses one kitchen and bathroom inside the flat is not an HMO. A house split into self-contained flats can still be an HMO at the building level if a single tenancy covers the whole property.

Check a property in Merton

Use the postcode and address checker to confirm the council and the local scheme area. Use the quick test below to see whether the property setup meets the mandatory HMO rule.

Check if you need an HMO licence

A postcode cannot tell us how many people live in the property. Answer these four questions and we will say whether the mandatory HMO rule is likely to apply.

Mandatory HMO licensing in Merton

Mandatory HMO licensing is national law. Every council in England runs it, including Merton. A property needs a mandatory HMO licence when five or more people from two or more households live in it and share a toilet, bathroom or kitchen.

The rule sits in the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018. There is no postcode test. If the property meets the headcount and household test anywhere in England, it needs a licence from the local council.

The licence has to be in place before the tenancy starts. Renting out an unlicensed mandatory HMO is a criminal offence. Councils can prosecute or apply a civil penalty of up to £40,000 per offence, and tenants can apply for a rent repayment order of up to 12 months of rent already paid.

Additional HMO licensing in Merton

Additional HMO licensing is a discretionary scheme. A council uses it to catch smaller shared homes that fall below the mandatory threshold. The rules sit in Part 2 of the Housing Act 2004 and the scheme has to be formally designated by the council.

Merton runs an active additional HMO licensing scheme. The detail below is taken from the council's own designation notice.

Merton additional HMO licensing

Additional HMO licensing · active · Listed wards

Coverage
Listed wards
Term
5 years
Occupant threshold
3 or more
Household threshold
2 or more
Fee per property
£1,566

Merton additional HMO licensing applies to HMOs occupied by three or four people forming more than one household in the listed wards.

Paid in two parts. For a two-bedroom additional HMO licence, Part A is £267 and Part B is £1,299. Total fees rise by bedroom count from £1,566 for two bedrooms to £1,674 for four bedrooms.

Properties exempt from this scheme

  • Properties licensable as an HMO under mandatory licensing
  • Properties let by a local authority or a Registered Provider (RP), traditionally known as a not-for-profit Housing Association
  • Properties already subject to a management order or empty dwelling management order
  • Properties subject to a temporary exemption notice
  • Owners who reside in property they own as their main residence (owner-occupiers)
  • Holiday lets, tenancies under a long lease over 21 years and business tenancies
  • HMOs managed by a charity registered under the Charities Act 2011 that are night shelters or temporary accommodation for people suffering or recovering from drug or alcohol abuse or a mental disorder
  • Buildings occupied principally for the purposes of a religious community whose principal occupation is prayer, contemplation, education or the relief of suffering
  • Student accommodation directly managed by educational institutions, such as halls of residence
  • Homes let to up to two single people who are unrelated
  • Single family dwellings where a dwelling is occupied by one household
  • Homes with up to two lodgers
  • Section 257 HMOs where the converted building is less than three storeys or the building and self-contained flats are under different ownership or control

Discounts the council offers

  • £50 discount may apply where the applicant is accredited under, or a member of, LLAS, NRLA, NALS, UKALA, ARLA or RICS.
  • Discounts are determined after submission and assessment of the full application and supporting documents.
  • A discount will not apply where the council has made two or more consecutive requests for additional supporting documents or information.
  • A discount will not apply where the council has served a warning letter or notice for failure to license a property.
Apply for this licence on the council site

Common HMO setups in Merton

HMO licensing tests two things at the same time: who lives in the property and where the property is. Here is how the most common setups land under Merton's current rules.

Three sharers from different households

This is a small HMO under section 254. Merton's additional HMO scheme catches three-person shares, so the property needs an additional HMO licence if it sits inside the scheme area. Mandatory HMO licensing does not apply at this size.

Four sharers from different households

Merton's additional HMO scheme catches four-person shares. The property needs an additional HMO licence inside the scheme area. Mandatory HMO licensing only kicks in at five.

Five or more sharers from different households

Mandatory HMO licensing applies anywhere in England. The headcount and household test is national, not council-specific. Merton's additional HMO scheme then adds extra conditions on top of the mandatory licence inside the scheme area.

A house converted into bedsits or self-contained flats

A house split into bedsits or non-standard flats can be a section 257 HMO under the Building Regulations test, even when the headcount is below five. Merton's additional HMO scheme can include section 257 HMOs in scope. The application asks for floor plans and proof that the property meets the 1991 Building Regulations.

Live-in landlord with one or two lodgers

The Schedule 14 exemption usually applies. The owner-occupier and the lodgers are treated as one household for licensing purposes, so the property is not an HMO and no licence is needed. Three or more lodgers brings it back inside the HMO definition.

What an HMO licence costs in Merton

Additional HMO licence
£1,566

Paid in two parts. For a two-bedroom additional HMO licence, Part A is £267 and Part B is £1,299. Total fees rise by bedroom count from £1,566 for two bedrooms to £1,674 for four bedrooms.

A landlord who qualifies for the strongest discounts the council offers pays around £1,516 instead of the headline £1,566. Discounts usually need to be evidenced at the point of application, not after the licence is issued.

HMO standards the council assesses

Merton assesses every HMO licence application against statutory standards and the council's own published amenity rules. The application is not a paperwork exercise. Most councils inspect before issuing the first licence, and refusals are common where the property does not meet the standard.

Room sizes. The Licensing of Houses in Multiple Occupation (Mandatory Conditions of Licences) (England) Regulations 2018 set minimum sleeping room sizes: 6.51 m² for a single adult, 10.22 m² for two adults, and 4.64 m² for a child under ten. A bedroom that does not meet the minimum cannot count as a let room on the licence.

Bathrooms and kitchens. Councils typically require one bathroom per five occupiers and a kitchen sized for the number of households sharing it. Merton's exact amenity standard is published with the application pack and is enforced as a licence condition.

Fire safety. Interlinked smoke alarms on every storey, a heat alarm in the kitchen, fire doors on every habitable room (FD30 typically), and a clear protected escape route. A fire risk assessment under the Regulatory Reform (Fire Safety) Order 2005 is the landlord's responsibility and the council can ask for the assessment at any time.

Gas, electrical and energy. An annual gas safety certificate (if there is a gas supply), an EICR no more than five years old, and an Energy Performance Certificate of E or above for the property to be let lawfully under the Minimum Energy Efficiency Standard regulations.

Planning permission and Article 4 directions

Converting a family home to an HMO is a change of use from Class C3 (dwellinghouse) to Class C4 (small HMO, up to six occupiers) or a sui generis HMO (seven or more). Outside areas covered by an Article 4 direction, the C3 to C4 change is permitted development and no planning application is needed. The HMO licence is a separate process either way.

Merton may have an Article 4 direction that removes the permitted development right for HMO conversion in part or all of the borough. Where that applies, a planning application is required before the HMO can operate. The licence application then sits on top of the planning permission. Check the council's planning portal for current Article 4 areas before buying a property to convert.

Conversion to seven or more occupiers always needs a planning application as a sui generis HMO, regardless of whether an Article 4 direction is in force.

HMO mortgages and insurance

A standard buy-to-let mortgage does not normally permit HMO letting. Lending against an HMO needs an HMO mortgage product, often at a higher rate and with stricter loan-to-value caps. Lenders ask to see the HMO licence reference at completion and at renewal. Letting an unlicensed HMO breaches the mortgage conditions and can trigger a default.

Landlord insurance for an HMO is priced separately from single-let insurance. Cover for malicious damage, loss of rent, and public liability scales with occupier count. Insurers can refuse a claim where the property should have been licensed and was not, so the licence number goes on the policy schedule.

For overseas owners, Merton also expects a UK-based managing agent named on the licence application. The agent's address has to be a real correspondence address, not a virtual office, so the council can serve notices.

Talk to Merton directly

Anything on this page that you cannot find an answer to, the council's licensing team can confirm in minutes.

Email the licensing team

[email protected]

Apply for a licence

Application form on Merton's website

Official licensing page

Merton council guidance

How to apply for an HMO licence

Applications go to the council. Merton asks for the property address, the landlord and any agent's details, a floor plan, an Energy Performance Certificate, a current gas safety certificate, a current electrical safety report, and the fee.

The council assesses the application against HMO management regulations. The property has to meet room-size rules, fire-safety standards, and the council's HMO amenity standards on bathrooms, kitchens, and fire doors. Most councils inspect before issuing.

A licence usually lasts five years. It is tied to the named licence holder and the named property. Sell the property, change the manager, or change the number of occupiers above the licence and the licence has to be updated or re-applied for.

Penalties for unlicensed HMOs

Renting out an unlicensed HMO is a criminal offence under section 72 of the Housing Act 2004. The council can prosecute, or it can apply a civil penalty of up to £40,000 per offence and skip court.

Tenants of an unlicensed HMO can apply to the First-tier Tribunal for a rent repayment order of up to 12 months of rent. Universal Credit paid for the same period can also be reclaimed.

A landlord cannot serve a valid section 21 notice on a tenant of a property that should have an HMO licence but does not. That blocks no-fault eviction until the licence is in place.