Section 257 HMOs: Definition, Licensing and Finance

What is a Section 257 HMO?

A Section 257 HMO is a converted block of flats that is treated as a house in multiple occupation as a whole. The test sits in section 257 of the Housing Act 2004. Two things usually have to be true. First, the conversion does not meet the Building Regulations 1991 standard that applies to converted flats. Second, fewer than two-thirds of the flats are owner-occupied. Each flat may have its own front door, kitchen and bathroom. Occupiers may hold an ordinary assured shorthold tenancy. The building can still be an HMO. That is what a S257 HMO is: a converted block, not a purpose-built block of flats, that fails the 1991 standard and is not predominantly owner-occupied.

People also write Section 257 house in multiple occupation or S257 HMO. The meaning is the same. It is different from a standard three-person house-share under section 254. See what is an HMO for the other legal tests. Specialist HMO mortgages treat S257 stock as a specialist subset — closer to a converted block than to a small C4 house.

Licensing and Section 257 HMOs

Section 257 tells you the building is an HMO. It does not automatically issue an HMO licence. In England, s.257 converted blocks are excluded from mandatory Part 2 licensing by the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2018 (SI 2018/221). They can be licensed only under an additional licensing scheme if the council has designated one that covers them. Some authorities licence the block as a whole; some look at individual flats if those flats are themselves HMOs under section 254. Islington, for example, publishes a separate Section 257 additional-licensing fee for converted buildings containing self-contained flats. Always ask the licensing team: “Is this address a Section 257 HMO, and does additional licensing apply?” Do not assume that self-contained flats are exempt.

How to get Section 257 HMOs: step by step

You do not “apply to become” a Section 257 HMO. The building either meets the statutory test or it does not. The practical path is: 1. Establish how the building was converted and whether it meets the 1991 Building Regulations. A surveyor or fire engineer who knows converted stock is the usual source. 2. Count owner-occupied flats versus rented flats for the two-thirds test. 3. Ask the council whether the block is an HMO and whether a licence is required. 4. If a licence is required, apply with plans, a fire-risk assessment and the named manager. 5. Put management arrangements and building insurance on a block basis. 6. If you are buying, tell the mortgage broker it is S257 stock before they approach a standard small-HMO panel.

Documents you will need

Typical pack: title and lease structure, conversion history, any building-regulations completion certificates, a current fire-risk assessment, alarm and emergency-lighting certificates, the licence or application, floor plans of the block, tenancy schedule, and (for a purchase) the seller's management and service-charge accounts. Lenders often want a specialist valuation of the block or of the flat inside an S257 freehold. A fire alarm certificate is not the same document as the fire-risk assessment — see the FAQs.

For more on this topic, see our guide to property investment.

Tax and stamp duty

Stamp duty on a converted block or on a flat inside one depends on whether the purchase is treated as residential, mixed, or multiple dwellings, and on any surcharge that applies to you. There is no special “Section 257 SDLT rate”. Do not copy a neighbour's return. Use a conveyancer who has done converted blocks and, if needed, the HMO stamp duty calculator as a planning tool. This is not tax advice. Income tax or corporation tax on the rents follows how you own the block, not the section 257 label.

Landlord duties and management

Where the building is a s.257 HMO in England, the manager's duties sit in the Licensing and Management of Houses in Multiple Occupation (Additional Provisions) (England) Regulations 2007 (SI 2007/1903), not the 2006 management regulations: repair, cleanliness of common parts, fire precautions, waste and occupier information. In a converted block that usually means stairs, landings, meters, shared alarms and the front door. Individual flats still have repairing obligations under the tenancy. A managing agent who only thinks in single ASTs will miss the block-level duties. Fire risk must be assessed for the common parts under the Fire Safety Order as well as under housing law.

For more on this topic, see our guide to HMO Rules & Regulations: What Every Landlord Must Know.

For more on this topic, see our guide to The UK Landlord’s Guide to HMO Property Licensing.

Penalties and enforcement

Letting a licensable S257 HMO without a licence is the same offence family as any other unlicensed HMO: prosecution or a civil penalty of up to £40,000, and a rent repayment order of up to two years' rent. Management-regulation breaches attract their own penalties. Planning enforcement can sit alongside if the conversion never had permission. Mortgage conditions treat an unlicensed or unmanaged block as a breach.

Council and local rules

Councils differ on whether they licence the block, the flats, or both, and on amenity and fire standards for older conversions. Some publish a dedicated S257 page and fee. Others fold converted blocks into the general additional-licensing designation. There is no national public register of Section 257 buildings. Ask the local housing authority for the address. If you are buying one flat, ask whether the freehold is treated as an S257 HMO — that fact affects the works the freeholder may be required to do and the mortgage you can use.

FAQs

What are the building regulations for HMOs in the UK?

New works follow current building regulations. The Section 257 test looks back at whether a converted block meets the 1991 standard. Those are different questions.

What does the Housing Act 2004 cover?

Among other things, the definition of an HMO (including s.257), licensing, management regulations and enforcement.

Can a HMO be stopped?

The council can refuse or revoke a licence, serve notices, or take planning enforcement. A lawful licensed S257 block is not stopped by neighbour objection alone.

Can you live in your own HMO?

Owner-occupiers count towards the two-thirds test. A block that is mostly owner-occupied may fall outside s.257 even if the conversion is old.

Do tenants in HMOs pay council tax?

Self-contained flats are often banded separately. Confirm with the billing authority. It is not automatic that the freeholder pays one bill for the block.

How many people can live in a house without it being a HMO?

A conventional house uses the s.254 tests (usually three or more people, more than one household). S257 is about the converted block, not that headcount.

What is a S257 HMO?

A converted block of flats that fails the 1991 Building Regulations test and is not two-thirds owner-occupied, treated as an HMO as a whole.

Need help with a planning application?

Planning for the original conversion is a planning matter. Licensing is housing. Use a planning consultant for the first and the council licensing team for the second. We can discuss the mortgage once the use is clear.

What is a Section 257 house in multiple occupation (S257 HMO)?

The same as a Section 257 HMO: the converted-block test in s.257 of the Housing Act 2004.

What Legislation and Regulations apply to S257 HMOs?

Housing Act 2004 s.257 and Parts 2–4, SI 2007/1903 (s.257 management duties in England), the Fire Safety Order, local additional-licensing designations, and ordinary tenancy and building-safety law.

Do I need a Fire Risk Assessment for my S257 HMO?

Yes in practice. Common parts of a converted block need a fire-risk assessment. Councils and lenders will ask for it.

What is a Fire Alarm Certificate and is it the same as a fire risk assessment?

No. A fire-alarm certificate records that the detection system was installed or serviced to a standard. A fire-risk assessment is the written evaluation of fire risks and the precautions required. You usually need both.

Next step: quote / speak to a specialist

Check how this affects your HMO mortgages enquiry. Tell us it is Section 257 stock so we do not send it to a small-C4-only panel. There is no charge for an initial review.

For more on this topic, see our guide to The Blueprint to Financing Your HMO Refurbishment.