If you're planning to invest in student accommodation, there's a good chance you'll be dealing with a House in Multiple Occupation — better known as an HMO. These properties are a core part of the student rental landscape, but they also come with specific legal obligations that every investor should understand.

What Exactly Is an HMO?

An HMO is a property rented out by three or more unrelated people who share common areas such as a kitchen, bathroom, or lounge. In the context of student housing, this typically means a group of students living under one roof, each with their own tenancy agreement or as part of a joint let.

If you're renting to a group of students who aren’t from the same family and who share facilities, you are almost certainly operating an HMO — even if it’s a standard three-bedroom terrace.

When Do You Need an HMO Licence?

Not all HMOs require a licence, but many do — especially in the student market.

You’ll need a mandatory HMO licence if:

Your property is occupied by five or more unrelated tenants
They share facilities like kitchens or bathrooms
The property is located in England, Wales, or Northern Ireland

Local councils can also impose additional licensing rules, meaning even smaller HMOs (3+ people) may require a licence in certain areas. These schemes are especially common in university towns and cities where demand for student housing is high.

Always check with the local authority before letting — non-compliance can lead to fines up to £30,000. You can find more details on how to obtain a HMO license on the GOV.UK website.

Why HMOs Are Popular With Student Landlords

Despite the regulatory requirements, HMOs remain highly attractive for student property investors. Why?

Higher Yields: Multiple tenants mean multiple income streams, often producing stronger gross and net returns than single-let properties.
Consistent Demand: In university cities, there’s a steady stream of new tenants each academic year.
Rental Stability: Many students sign up for 12-month contracts, even if they only occupy the property during term time.

When managed well, student HMOs can deliver strong cash flow and capital appreciation — especially in areas where PBSA options are limited.

What Do You Need to Comply?

To operate a licensed HMO legally, you’ll typically need:

Sufficient kitchen and bathroom facilities for the number of occupants
Fire doors, smoke alarms, and sometimes emergency lighting
Annual gas safety checks and regular maintenance
A “fit and proper” landlord status
A clear management plan for the property

The license usually lasts for five years, although this varies by council. The NRLA (National Residential Landlords Association) provides useful resources around HMO responsibilities and compliance for landlords managing student lets.

HMO vs PBSA: Which Is Right for You?

For hands-on investors looking to maximise yield, HMOs remain a go-to strategy. However, if you’re based overseas or prefer a passive income stream, Purpose-Built Student Accommodation (PBSA) offers an alternative. These are professionally managed, fully compliant units often sold with assured yields and no ongoing landlord responsibilities.

At APW Group, we help investors explore both routes — matching each client to the strategy that suits their risk profile, time horizon, and income goals.

Ready to Invest in Student Property?

Ready to explore accommodations for students? At APW Group, we can give you access to pre-vetted developments in high-growth university cities — with expert guidance from sourcing to completion.

Our team brings over 30 years of experience in property and fixed income investments, guiding you through everything from discovering the perfect property to sourcing lenders.

Looking for your entry point into the student accommodation market? Get in touch today.

What Is an HMO? A Guide for UK Student Landlords