Planning an HMO in London: feasibility before purchase

Treat planning and licensing as separate checks

An HMO proposal needs more than a plan showing extra bedrooms. Establish the intended number of occupants and households, shared facilities and management arrangement. Then check the council's planning position and housing-licensing requirements separately. A licence does not itself demonstrate that the planning use is lawful.

GOV.UK describes mandatory licensing for large HMOs occupied by five or more people forming more than one household and sharing facilities, subject to the applicable rules and exemptions. Councils can require licences for other properties through local schemes. Check the current scheme covering the exact address; a smaller HMO should not be assumed exempt from licensing.

Confirm the planning route locally

Small HMOs commonly fall within planning use class C4, while larger arrangements may be sui generis. Occupancy and the facts of the use matter. An Article 4 direction can remove a permitted change-of-use right. Check the direction, map, effective date, planning history and relevant local policies before assuming a house can be converted.

Hounslow's policy illustrates why licensing and planning teams need distinct information; it is not a substitute for another borough's requirements. Obtain advice for the actual property and proposed operation rather than applying one council's position across London.

Design for residents and management

Test usable room sizes, shared cooking and living space, bathrooms, storage, waste, cycle parking and the route through the building. National and local standards, licence conditions and the applicable fire-safety requirements all need consideration. Do not rely on a bedroom area alone to establish an acceptable occupancy.

Bring competent fire, building-control and other specialist advisers into the design at the appropriate stage. Services, acoustic separation, ventilation and access for maintenance can affect both the layout and the investment appraisal.

Appraise the operating business

• Evidence-based rent assumptions for compliant accommodation.
• Construction and professional costs, including necessary upgrades.
• Licensing and management costs.
• Utilities, cleaning, repairs and replacement reserves.
• Void periods, arrears, insurance, finance and tax.
• A fallback use if the preferred occupancy is not achievable.

Contact us before exchange or auction bidding. We can review the property's architectural potential and identify the planning and specialist checks needed. Your solicitor, tax adviser and finance adviser should assess the purchase and operating structure alongside that feasibility work.