HMO Conversion in London: the Planning Route, the Layout That Passes and What It Costs

Which planning route your HMO conversion needs

Three routes exist. Which one applies depends on what the building is now and how many people will live in it.

A house is Class C3 in the Use Classes Order. A small HMO is Class C4: a dwellinghouse shared by not more than six residents. Class L of the General Permitted Development Order lets a C3 house become a C4 HMO without a planning application. It also lets it go back.

Two things take you off that route. The first is an Article 4 direction, which removes the Class L right in a defined area. The second is scale: more than six residents is outside every use class. Planners call it sui generis, "of its own kind", and a change to it always needs full planning permission.

Two points catch people. Class L is not permitted where the result is two or more separate dwellings. Splitting a house into flats is a different route, covered in our guide to converting a house into flats in London. And building work is separate from use. A rear extension or a loft dormer has its own permitted development limits.

Check Article 4 before you buy

An Article 4 direction is a council order that removes named permitted development rights in a defined area. For HMOs it removes the C3 to C4 change. The house can still become an HMO, but only with planning permission. The application is judged against the borough's policies on family housing, concentration of HMOs, parking and amenity.

Many London boroughs have one, and several cover the whole borough. Newham made its direction on 31 July 2012 and it came into force on 31 July 2013. It covers the whole borough except the area controlled by the London Legacy Development Corporation. Hounslow's borough-wide direction for C3 to C4 took effect on 4 September 2023.

New directions are made every year, so check the address on the day you price the deal. Our guide to Article 4 directions in London explains the four places to check and what to do if the building is caught. For the HMO picture borough by borough, read our guide to HMO Article 4 directions.

If the direction applies, you apply for full planning permission for the change of use. From 1 April 2026 the council fee for other changes of use is £610, with £732 proposed from 8 December 2026. The council has eight weeks to decide a non-major application, or longer by written agreement.

The real cost of Article 4 is not the fee. It is the policy test. A borough with a direction usually also has a policy limiting how many HMOs can sit in one street, or protecting family-sized houses. Read that policy before you exchange, not after.

The layout that passes: room sizes, kitchens, bathrooms and fire

The unit count sets the yield, and the licensing standards set the unit count. Design the layout to the standards first and the planning drawings follow. Design it the other way round and you lose a room at the licence inspection.

Room sizes set the unit count

For a licensed HMO in England, a bedroom for one person aged over 10 must be at least 6.51 m². A room for two people over 10 must be at least 10.22 m². A room for one child under 10 must be at least 4.64 m². A room under 4.64 m² cannot be used for sleeping at all.

These are licence conditions. A council that finds a breach gives up to 18 months to put it right.

They are also national floors. Most London boroughs publish their own HMO standards with larger minimums, especially for rooms without a separate living room. The same standards set ratios of kitchens, bathrooms and toilets to residents. Ask for the borough's standard before you draw a single partition.

Fire protection follows the layout

When a building gains rooms for residential purposes, or changes the number of them, that is a material change of use under the Building Regulations. The whole building must then meet Part B on fire and Part E on sound between rooms. Part F on ventilation, Part G on hot water and sanitation and Part L on energy apply too.

In practice, London councils apply the LACORS housing fire safety guidance. For a multi-storey shared house that means a protected escape route with 30-minute fire doors. Usually that is FD30 doors to every room opening onto the stair, plus a mains-wired alarm system with interlinked detectors.

Lower-risk two-storey houses can be treated more lightly. Once let, the HMO management regulations require the escape route to be kept clear and the alarms maintained.

Four layout rules decide most schemes:

1. Escape first. Every bedroom door opens onto a protected route to the final exit, so no bedroom is reached through another room or a kitchen.
2. Kitchens sized to residents. A six-room HMO needs a kitchen the borough's standard accepts for six, with enough cookers, sinks and worktop, not a two-ring hob in a cupboard.
3. Bathrooms to ratio. Shared bathrooms and toilets to the borough's ratio, or en-suites that raise the rent and the build cost together.
4. Sound between rooms. Partitions between letting rooms need the Part E standard, which rules out the lightest stud walls.

What an HMO conversion costs in London

There is no honest single price for an HMO conversion, because the work depends on the building you start from. What we can give you is our 2026 rate bands, construction only, ex VAT and fees. Your fixed figure comes after a survey.

London typically runs around 9% above the national bands these rates are built on. Listed fabric, basements and prime finishes take a building higher.

As an illustration, not a quote: a 130 m² three-bedroom terrace becoming a six-room HMO on the lighter band is £137,000 to £195,000 of construction. That is roughly £23,000 to £32,500 per letting room. Add the planning fee where an application is needed, Building Regulations fees, the licence fee set by the borough, and furniture.

For the bigger picture on conversion budgets, including VAT and the costs outside the build, see our guide to commercial to residential conversion cost.

How long an HMO conversion takes

The programme runs in a fixed order, and the first steps cost the least.

1. Route check. Use class, Article 4 map, borough HMO policy and licensing standard: days, not weeks, if you have the address.
2. Survey and layout. A measured survey, then a layout drawn to the licensing standard with the escape route and room sizes fixed.
3. Planning, where needed. Eight weeks from a valid application for a non-major scheme, longer by agreement. No application where Class L applies.
4. Building control. A full plans application or a building notice for the works; the fire strategy and sound detailing go in here.
5. Works. Strip-out, structure and services, partitions, fire doors and alarms, kitchens and bathrooms, decoration, testing.
6. Licence. Apply to the borough before the first tenant moves in; the licence runs for up to five years.

On site, we fix the completion date in the contract rather than quote generic weeks. Two steps slip. Planning, where a committee or a neighbour objection adds months. And the licence, where an inspection finds a room short of the standard. Both are avoided by designing to the standards from day one.

Licensing after the works

A licence is a condition of letting, not of building, but it is where a weak conversion is found out. Mandatory licensing in England covers any HMO occupied by five or more people in two or more households who share a kitchen, bathroom or toilet. Since 1 October 2018 that applies whatever the number of storeys.

Many London boroughs run additional licensing schemes that bring smaller HMOs in, and selective licensing for all private lets in named areas. Check the borough's scheme for the address: a three-person share can need a licence in one borough and not in the next.

A licence lasts up to five years and comes with conditions. An updated gas safety certificate every year, smoke alarms installed and maintained, electrical safety certificates on request, and a fit and proper manager. The council may add conditions, including improving the facilities. Fees are set by each borough.

Our guide to HMO licence and regulations covers the conditions in full.

Build to the standard and the licence is a formality. Miss a room size and it is 18 months of lost rent on that room.

What kills the numbers

Most failed HMO deals fail on one of five points, all of them visible before exchange.

1. Article 4 and a refusal. The house sits in a direction area, the borough has a concentration policy, and the application is refused. The exit is a sale back to the family market at the price you paid, less costs.
2. Sui generis at seven. The appraisal works at seven rooms, but seven is a full application against stricter policy. Price the scheme at six and treat the seventh as upside.
3. Parking and amenity. Outer boroughs ask for parking, cycle storage and refuse space per resident. A terrace with no rear access can fail on bins alone.
4. The converted block trap. A building split into flats that did not meet the building standards of the day can itself be an HMO. Section 257 of the Housing Act 2004 applies where fewer than two-thirds of the flats are owner-occupied. Buyers of "ready-made" conversions inherit that.
5. Family housing policy. Many London Plans protect three-bedroom family houses from subdivision. The policy applies whether or not an Article 4 direction exists.

Our rule on viability is simple. We appraise every HMO at the room count the licensing standard supports, not the count the agent's floor plan shows.

Commercial to HMO: office, pub or shop

A commercial building never qualifies for Class L. A pub is sui generis already; a shop or office sits in Class E. In every case the HMO needs a full planning application for change of use. The council will weigh the loss of the commercial use before it looks at the rooms.

The same buildings often make the best HMOs. Deep plans, high ceilings and a goods entrance for bins and bikes. A shell that can take a clean new layout instead of a compromise around a Victorian stair. Our guide to Class E explains which commercial buildings sit where.

The build is a material change of use under the Building Regulations in full. Fire compartmentation, a protected stair, sound between rooms and a thermal upgrade all apply to the whole building. That is why the commercial band in our rate table starts higher than a simple house conversion.

It is also why the job belongs with our commercial to residential conversion team rather than a domestic refurbishment crew.

From address to first tenant under one contract

An HMO conversion has four hand-offs where money leaks. Each gap is a redesign or a lost room.

• The planning consultant to the architect
• The architect to the fire engineer
• The fire engineer to the builder
• The builder to the licensing officer

We close them under one contract. Send us the address and the number of rooms you want. We check the use class, the Article 4 map and the borough's HMO standard. We draw the layout to the licensing standard, run the planning application where one is needed, and build it. The handover pack is written for the licence inspection.

Craftex started in 2016 as a carpentry and joinery company. Around 60% of our labour is still in-house, which keeps the fire doors, partitions and joinery under our own control. We take on construction from £100,000 and design from a £15,000 minimum order. Every project we have delivered has finished ahead of programme.

Ready to test a building? Our change of use team prices the conversion before you exchange, so your offer is the one the numbers support. Send us the address and we run the checks below with you.