01206 544333
The relationship between HMO planning permission and HMO licensing rules is one of the most misunderstood areas of property investment in the UK.
While both frameworks regulate Houses in Multiple Occupation (HMOs), they serve entirely different purposes. As a result, it is possible for a property to be licensed for a higher number of occupants, but not legally permitted to house that many people under planning law.
This disconnect can create significant compliance risks for landlords and investors if not properly understood.
.
.
What Planning Law Regulates
Planning law is governed by the Town and Country Planning (Use Classes) Order and determines how a property can be used.
For HMOs, the key classifications are:
C4 Use Class – Small HMO
A C4 HMO covers properties occupied by between 3 and 6 unrelated individuals sharing basic amenities such as kitchens and bathrooms.
Under C4 planning use:
- The maximum number of individuals permitted is 6
- Planning focuses on the number of occupants, not the number of rooms or households
Sui Generis – Large HMO
If a property is occupied by 7 or more individuals, it is typically classified as Sui Generis.
This usually requires full planning permission and is assessed based on factors such as:
- Local density
- Parking availability
- Noise and disturbance
- Overall impact on the surrounding area
Planning law is therefore focused on the external impact of the property, rather than how it operates internally.
.
What HMO Licensing Regulates
HMO licensing is governed by the Housing Act 2004 and is separate from planning law.
Licensing focuses on internal standards and safety, including:
- Room sizes
- Fire safety compliance
- Kitchen and bathroom facilities
- Suitability of occupancy based on layout
Importantly, HMO licensing assesses how many people can live in a property safely, based on the available space and facilities.
.
The Key Difference Between Planning and Licensing
The main distinction is that:
- Planning controls how a property is used and the number of individuals permitted
- Licensing controls how many people can safely occupy the property based on its internal setup
This is why a property could be licensed for a higher number of occupants than is permitted under planning rules.
For example, a property may be licensed for multiple households based on room sizes and layout, while planning permission may still restrict the total number of individuals to six under C4 use.
(6 Households based on 6 rooms, but if the rooms are large enough for 2 people = 12 licensed individuals / occupants. However, planning only allows for 6 individuals / occupants in total)
Understanding this difference is critical, as holding a licence does not override planning restrictions.
.
Why Mismatches Happen
It is not uncommon for planning permission and licensing to appear inconsistent. This is usually due to:
- Different council departments handling planning and licensing
- No requirement for licensing teams to verify planning status
- Licensing assessments focusing on safety rather than planning use
- Limited communication between departments
This can lead to situations where landlords believe they are compliant, when in reality planning restrictions may still apply.
.
Risks for Landlords and Investors
Failing to understand the difference between planning and licensing can lead to:
- Breaches of planning permission
- Enforcement action by local authorities
- Restrictions on occupancy levels
- Potential financial penalties
For investors, this can also impact property valuations, rental income projections, and long-term strategy.
.
What to Check Before Investing in an HMO
Before purchasing or converting a property into an HMO, it is important to:
- Confirm the planning use class of the property
- Check whether planning permission is required for the intended occupancy
- Review existing HMO licence conditions
- Ensure both planning and licensing align with the intended use
- Seek professional advice where needed
Taking these steps early can prevent costly issues later.
.
.
How can Advocate Finance help?
We provide a FREE assessment of all our services. Please contact us directly for more information, or use the Get in Touch With Us Today feature at the bottom of this page.
