Additional Licensing
A discretionary HMO licensing scheme a council can introduce under section 56 of the Housing Act 2004 to cover smaller HMOs that fall below the mandatory five-person, three-storey threshold. It is separate from selective licensing (which covers all rented homes in a designated area, not just HMOs). Operating an unlicensed HMO where additional licensing applies is a criminal offence with civil penalties up to £30,000 and exposure to a Rent Repayment Order of up to 24 months’ rent.
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Related terms
Landlord Licensing
Local authority schemes that require landlords to hold a licence to let property in a defined area. Three types: mandatory HMO licensing (national), additional licensing (smaller HMOs), and selective licensing (non-HMOs). Operating without a required licence carries fines up to £30,000 and can invalidate possession claims.
Article 4 Direction
A planning tool councils use under article 4 of the Town and Country Planning (General Permitted Development) Order 2015 to remove permitted-development rights, most commonly the right to convert a single-family home (Use Class C3) into a small HMO (Use Class C4) without planning permission. In an Article 4 area, every C3 → C4 conversion needs a full planning application, and operating without it can trigger an enforcement notice, a planning contravention notice or a refusal of HMO licence.
Awaab's Law
Provisions extending to the private rented sector under the Renters Rights Act 2025 that set strict timescales for landlords to investigate and remedy hazards such as damp and mould. Named after Awaab Ishak. Breach can lead to tenant compensation and enforcement by the local housing authority.
HMO (House in Multiple Occupation)
A property let to 3 or more people from 2 or more households who share facilities (kitchen, bathroom, toilet). Any HMO with 5 or more occupants from 2 or more households needs a mandatory HMO licence from the local authority. Many councils also operate additional licensing for smaller HMOs.
Mortgage Interest Tax Credit (Section 24)
The 20% basic-rate tax credit that replaced full mortgage interest deduction for individual UK landlords under section 24 of the Finance (No.2) Act 2015. From 6 April 2020, finance costs (mortgage interest, loan interest, mortgage broker fees) are no longer deductible from rental profits; instead HMRC gives a tax reducer at the basic rate, capped at the lower of finance costs, property profits or adjusted total income after personal allowance. Higher- and additional-rate taxpayers are materially worse off than pre-2017; Limited Company landlords are unaffected because Ltd interest remains a fully deductible business expense.
Stamp Duty Surcharge (Additional Property)
The additional 5% Stamp Duty Land Tax surcharge (England and Northern Ireland, raised from 3% on 31 October 2024) on the purchase of an additional residential property over £40,000, including most buy-to-let purchases and second homes. Applies on top of the standard SDLT residential bands. A separate 2% non-resident surcharge applies to non-UK-resident buyers. Refundable within 36 months if the previous main residence is sold; rules differ in Scotland (Land and Buildings Transaction Tax + 8% Additional Dwelling Supplement) and Wales (Land Transaction Tax + 4% Higher Residential Rate).