Review of Mandatory HMO Licence Fees
Changes to Mandatory HMO Licensing Fees
A mandatory Houses in Multiple Occupation (HMO) licence is required in England for properties occupied by five or more people from two or more households who share amenities such as kitchens and bathrooms. Cornwall Council is proposing to raise these licence fees. These fees are used solely to support the Council in carrying out its legal duties, ensuring HMOs are safe, well managed, and meet the standards required under the Housing Act 2004. Importantly, recovering the costs of licensing through these fees ensures that local taxpayers are not subsidising the operation of the licensing scheme. The responsibility for covering the licence costs sits with those requiring the licence.
We appreciate the ongoing cooperation of landlords and their representatives during this time, and we understand that any increase in fees may be challenging, especially given wider financial pressures. At the same time, HMO licence fees in Cornwall have remained unchanged for the past eight years.
Why are we reviewing HMO licence fees?
Local authorities are required to ensure that licensing schemes are fully self‑funding. This means that licence fees must cover the actual costs of processing applications, inspecting properties, and providing advice and support to help landlords comply with legal requirements.
The current fees have remained unchanged for the past eight years and no longer reflect officer time, case complexity, compliance demands, and rising costs like staffing and systems. The proposed fee has been carefully reviewed to reflect the current time and resources required to deliver these services effectively in Cornwall.
What are we proposing to change?
The proposed HMO licence fee has been recalculated to ensure it remains fair, transparent, and proportionate, and that it reflects only the work required to process and monitor HMO licences.
As part of this change, the proposed fee structure would move to different licence fees based on the number of lettable rooms in an HMO, reflecting the increased time, inspection activity, and regulatory work typically associated with larger properties. This approach is intended to ensure fees remain fair, transparent, and proportionate, while meeting the legal requirement for the licensing scheme to be fully cost‑recovering. We are proposing that we will review these fees in line with inflationary costs on an annual basis to ensure they remain at full cost-recovery.
We are proposing to introduce a £50 fee discount for accredited landlords, i.e. those with active accreditation through the Cornwall Responsible Landlord Scheme or recognised landlord associations (e.g., Cornwall Residential Landlord Association or Southwest Landlord Association). To qualify, accreditation would need to be current and show that the landlord is working to recognised standards and good management practices.
What is not changing?
While changes to HMO licence fees are being proposed, several essential elements of the licensing scheme will remain the same.
- No profit from licensing: By law, the Council cannot make a profit from HMO licensing, nor can it use licence fees to fund other Council work. Licence fees will continue to be set only to recover the actual costs of administering, monitoring, and enforcing the scheme.
- Legal requirements and property standards: The legal standards HMOs must meet under the Housing Act 2004, and the Council’s role in ensuring tenant safety and property standards, are not changing.
- Licence length and overall approach: The proposed changes do not affect the length of an HMO licence or the Council’s overall approach to working with landlords and agents to support compliance and good management.
What are the current and proposed HMO licence fees?
NB – A licence is usually valid for 5 years.
Current Licence Fees
Licence Type | Part A | Part B | Total |
New | £700 | £781.04 | £1,481.04 |
Renewal | £500 | £610.77 | £1,100.77 |
Proposed New Licence
Number of Rooms | Part A | Part B | Total | Daily rate over 5 years |
5 | £910 | £1,047 | £1,957 | £1.07 |
6 to 8 | £910 | £1,152 | £2,062 | £1.13 |
9 to 10+ | £910 | £1,257 | £2,167 | £1.19 |
Proposed Renewal Licence
Number of Rooms | Part A | Part B | Total | Daily rate over 5 years |
5 | £812 | £1,047 | £1,859 | £1.02 |
6 to 8 | £812 | £1,152 | £1,964 | £1.08 |
9 to 10+ | £812 | £1,257 | £2,069 | £1.13 |
How might this affect you?
We understand that HMO landlords and agents operate across a wide range of settings and business models, from student accommodation to shared housing for people on lower incomes. We also recognise that margins, responsibilities, and pressures can vary significantly depending on the type and scale of operation.
To help illustrate potential impacts, the examples below show what the monthly equivalent of the licence fee would be for a 5-bed HMO over 5 years (60 months), expressed as a percentage of average monthly rental income. They compare current and proposed fees for new licences and renewals and show the percentage-point difference between the two.
Example 1: Low-income HMOs (LHA-based)
Most HMOs are within the Kernow West LHA. Using the shared accommodation rate of £90.33 per week, this equates to approximately £391.43 per month. For a 5-room property, this gives an indicative monthly rental income of £1,957.15.
Scenario | Monthly licence cost | Monthly income | % of monthly income | Difference |
Current renewal | £19 | £1,957 | 0.97% | +0.61% |
Proposed renewal | £31 | £1,957 | 1.58% | |
Current new | £25 | £1,957 | 1.28% | +0.41% |
Proposed new | £33 | £1,957 | 1.69% |
Example 2: Student HMOs
Using Rightmove data (FY 25/26), the average monthly rental income for a 5-bed student let is approximately £3,400.
Scenario | Monthly licence cost | Monthly income | % of monthly income | Difference |
Current renewal | £19 | £3,400 | 0.56% | +0.35% |
Proposed renewal | £31 | £3,400 | 0.91% | |
Current new | £25 | £3,400 | 0.74% | +0.23% |
Proposed new | £33 | £3,400 | 0.97% |
These examples are illustrative only, and actual impacts will vary. We would welcome your views on how the proposed fee changes may affect different groups, including:
- Small or single‑property landlords
- Larger or portfolio landlords
- Letting and managing agents
- Tenants living in HMOs.
- Local communities affected by HMO activity
- Organisations supporting vulnerable tenants.
Have your say
We welcome views on the proposed changes to HMO licence fee structure, in particular from licence holders and individuals applying for their HMO licence, letting and managing agents, and landlord representative organisations.
We want to reassure you that all responses will be considered to ensure we understand the impact of these changes.
Your views will directly help us to:
- Understand how the proposed changes may affect different types of landlords.
- Identify any unintended or disproportionate effects.
- Consider whether any mitigation measures may be appropriate.
- Improve the way we communicate with landlords and administer the licensing process.
Overall, your feedback will help us ensure that the HMO licensing system continues to operate fairly and proportionately, balancing the need to protect tenants and improve housing standards while recognising the important role landlords and agents and their representatives play across Cornwall’s housing sector.
To provide your feedback, please complete the survey below by noon on Friday 17th July 2026.