Enter the postcode, property type, current bedroom count, intended HMO bedroom count, and floor area. The tool maps your postcode to the local authority and pulls their published licence-fee scale and any active Additional or Selective licensing area.

The tool flags whether the postcode falls within an Article 4 direction. If it does, it adds a planning permission cost line, plus the typical professional fees (planning agent £600 to £1,500, drawings £400 to £1,000, supporting statement £300 to £700) and a realistic refusal-and-resubmit risk percentage.

Fees vary widely between councils. The tool uses the council's published 5-year mandatory or additional fee where available, splits it into application and grant stages, and adds inspection costs. For 5-year licences this is typically £600 to £1,400 per HMO in 2025/26.

For each typical compliance area (fire alarm system, emergency lighting, fire doors, locks, heat detectors, electrical EICR remedials, portable appliance testing, kitchen capacity, bathroom ratio, gas safety, asbestos check) the tool produces a low and high estimate based on bedroom count and property age.

Add any specific quotes you have to override defaults.

Enter target rent per room, expected void rate (typically 3 to 6 weeks per room per year), management fee (10 to 15% for HMO-specialist agents) and ongoing compliance costs (annual gas safe, EICR every 5 years, smoke alarm tests, licence renewal).

The tool calculates net annual yield vs the single-family-let baseline.

Result panel shows total upfront cost, year-1 net rent uplift, payback period in months, and 5-year return on the conversion outlay. A red-amber-green flag indicates whether the project is financially viable, marginal, or likely to lose money once Article 4 risk is priced in.

Three overlapping schemes operate under the Housing Act 2004:

• Mandatory licensing: nationwide, any HMO with 5+ occupants from 2+ households
• Additional licensing: local discretion, typically 3-4 occupant HMOs in problem areas
• Selective licensing: covers all private rentals (not just HMOs) in designated areas, regardless of occupant count

You can be in two regimes at once. Always check the council's online scheme map and dates of designation.

Article 4 of the Town and Country Planning (General Permitted Development) Order 2015 lets a council remove specific permitted development rights in a defined area. For HMOs, the typical removal is the C3-to-C4 (small HMO, up to 6 occupants) right.

Once Article 4 is in force, converting a family home to a 3-6 person HMO needs full planning permission. Refusal rates in Article 4 zones are commonly 30 to 60% on first application, particularly in concentration-of-HMO wards.

Larger HMOs (sui generis, 7+ occupants) always need planning permission regardless of Article 4 status.

The Housing Health and Safety Rating System scores 29 hazards, including damp and mould, excess cold, fire, falls, electrical safety and overcrowding. A Category 1 hazard triggers a mandatory enforcement duty on the council.

Common HMO Cat-1 risks: poor heating in larger rooms, single-glazed windows in cold properties, narrow staircases without handrails, inadequate kitchen capacity for occupant numbers, and bathroom ratios below 1 per 5 occupants.

For a typical 2-storey HMO of 5 occupants:

• Mains-powered, interlinked, battery-backed smoke alarms in escape routes and habitable rooms
• Heat detector in kitchen
• 30-minute fire-resisting compartmentation between bedrooms and escape route, including FD30 fire doors with intumescent strips and self-closers
• Emergency escape lighting where escape route lacks borrowed light
• Annual fire risk assessment, in writing, by a competent person

3-storey HMOs add 60-minute compartmentation and protected stair enclosure. 4-storey adds AOV (automatic opening vents) and often a sprinkler requirement.

Cases where the maths fails:

• Small property where you can only add 1 extra bed at high upgrade cost
• Article 4 area with high refusal risk and £3,000 to £6,000 of professional fees at risk
• Local authority with a saturation policy refusing all new HMOs
• Soft rental market where per-room rent does not justify management overhead
• Owner without the time or skill for higher-touch tenant management

The honest answer for many properties is: continue as a single-family let.