Reading’s Borough-Wide HMO Licensing: Berkshire Landlords Face a Comply-or-Sell Decision

🏠 HMO · 22 October 2026 · 6 min read · Hiten Arya, Director

Since 1 March 2026, almost every house in multiple occupation in Reading has needed a council licence. For Berkshire landlords who thought a small three- or four-person shared house sat outside the rules, that is a significant change, and it is prompting a question I am hearing more often: is it worth keeping this property?

What changed in Reading

Reading Borough Council has designated a borough-wide Additional Licensing Scheme under the Housing Act 2004. Previously, only larger HMOs occupied by five or more people needed a licence. From 1 March 2026, smaller HMOs housing three or four people from two or more households, and not already caught by mandatory licensing, must also apply. Resident owner-occupiers sharing basic facilities with up to two lodgers generally do not need a licence.

Applications are made through the council’s Home Safe portal. The total fee is £1,500, split into £750 with the application and £750 once the draft licence is issued, and a licence can run for up to five years, although the council may grant a shorter one. [Blandy & Blandy, February 2026]

The cost of getting it wrong

Operating a licensable HMO without a licence after March 2026 is a criminal offence. The consequences set out by Blandy & Blandy include an unlimited fine or a civil penalty of up to £30,000, a Rent Repayment Order requiring up to 12 months’ rent to be repaid, and a greater likelihood of inspection and enforcement. Licensed properties must also meet standards on bedroom sizes, kitchens, bathrooms and toilets, and management, with conditions designed to prevent overcrowding.

For a landlord with a well-run, compliant house, a £1,500 fee spread over up to five years is manageable. For a landlord whose property needs work to meet room-size or amenity standards, the real cost is the refit and the void period while it happens.

Planning is a separate hurdle

Licensing is not planning permission. Reading also has an Article 4 Direction covering parts of the Park, Redlands and Katesgrove wards, and Jesse Terrace in Abbey ward, which removes the permitted development right to convert a family home into a small HMO. The council considers whether an HMO has planning consent when assessing a licence application, so a property without the right planning history can face difficulty on both fronts. The council has also proposed selective licensing for single-household lets, starting with Battle ward and later Park and Redlands wards. It is not yet designated, so no application can be made.

What about Slough and the rest of Berkshire?

Rules vary by council, so never assume. Slough Borough Council’s own website states that its additional and selective licensing designations ceased on 30 June 2024 and that future designations would be consulted on. Slough then consulted on reviving borough-wide additional and selective licensing from 15 July to 23 September 2026. As of 23 October 2026 its Cabinet had not published a decision, so no new scheme is in force; check directly with the council before you rely on either position. Mandatory licensing for larger HMOs continues to apply regardless.

Comply, or sell?

There is no single right answer, and I would never push a landlord to sell if keeping the property makes sense. In my experience the decision usually turns on five questions. Does the property already meet the standards, or does it need a costly refit? Does it have the right planning history, particularly in an Article 4 ward? What is the yield after licensing, compliance and management costs? How much time do you want to spend on regulation? And what would a buyer pay for it today?

A compliant, fully licensed HMO with clean paperwork is far easier to sell to an investor than one with gaps. If you do decide to exit, getting the paperwork in order first protects your price. Licences are granted to a named person and do not transfer to a new owner, so a buyer should check their own position before completion. Take legal advice on your own circumstances.

A practical checklist before you decide

Start with the paperwork you hold: current licence or application status, gas and electrical safety certificates, fire safety measures, planning consent, tenancy agreements and rent records. Then ask a surveyor or the council to confirm whether room sizes and amenities meet the licensing standards. Finally, get a realistic valuation both as an operating HMO and as a vacant house. The gap between the two often settles the decision, and it costs nothing to find out.

Selling an HMO with London Property Brokerage

HMOs are a specialism of ours. We know which investors are buying, what they look for, and how to present a house’s income, licence and compliance record so that it supports the price. Where a landlord prefers privacy, for example to avoid tenants learning of a sale or to protect a portfolio, we can also market a property discreetly off-market to our network of qualified buyers, with no public listing. Where an open-market sale will achieve more, we will say so plainly.

As the principal, I handle each instruction personally and with more than 40 years’ experience behind it. I don’t make excuses. I make results.

Sources: Blandy & Blandy, “The New HMO Landscape in Reading: What Landlords Need to Know” (19 February 2026); Slough Borough Council, “Changes to property licensing”; Landlord Knowledge (4 May 2026). Rules change; this article is general information, not legal advice.