HMO conversion costs: what to budget for in 2026

Converting a standard residential property into an HMO involves more than a typical refurbishment. Fire safety compliance, en-suite bathrooms, communal areas, and licensing all add costs that standard refurb estimates miss.

What counts as an HMO?

A house in multiple occupation (HMO) is a property rented to three or more tenants who form more than one household and share facilities such as a kitchen or bathroom. Larger HMOs (five or more tenants in properties of three or more storeys) require mandatory licensing. Many councils also operate additional licensing schemes that cover smaller HMOs.

The licensing requirement is the key differentiator. An unlicensed HMO cannot legally be tenanted, which means lenders cannot refinance against rental income and the entire BRRR strategy falls apart. Compliance costs must be in your budget from day one.

HMO refurbishment costs breakdown

Strip-out and plastering

Standard refurbishment scope applies: strip existing finishes, replaster or skim walls, prepare surfaces for decoration. For a 6 bed HMO, expect £4,000 to £8,000 for plastering depending on the condition of the existing walls and whether you are going back to brick in any rooms.

Electrical

HMOs have specific electrical requirements beyond a standard rewire. Fire alarm systems (Grade D1 or Grade A depending on size), emergency lighting on escape routes, and consumer unit upgrades to support multiple circuits for individual rooms. Total electrical costs for a 6 bed HMO typically run £5,000 to £10,000 including the fire alarm system. See our detailed breakdown of HMO fire safety costs.

Plumbing (en-suites and shared bathrooms)

Many HMO investors add en-suite shower rooms to bedrooms to increase rental value and reduce conflict between tenants over shared facilities. A basic en-suite (shower, toilet, basin) costs approximately £2,500 to £4,000 per room including plumbing, tiling, and sanitaryware. For a 6 bed HMO with 4 en-suites and 1 shared bathroom, plumbing and bathroom costs can reach £12,000 to £20,000.

Kitchen and communal areas

HMOs require communal cooking facilities adequate for the number of occupants. A 6 person HMO typically needs a kitchen of at least 10 square metres. If the existing kitchen is too small, reconfiguration or extension may be needed. A new communal kitchen supply and fit typically costs £5,000 to £10,000.

Fire doors and compartmentation

Every bedroom door, kitchen door, and door leading onto an escape route must be an FD30 fire door with intumescent strips, cold smoke seals, and a self-closing mechanism. Budget £200 to £450 per door, with 7 to 8 doors needed for a typical 6 bed HMO. See the full fire safety cost breakdown.

External works

Roof, gutters, fascia, garden, bins storage, and cycle storage. Councils often set conditions about external appearance and waste management as part of the HMO licence. External works on a typical conversion run £2,000 to £8,000.

HMO licensing and planning costs

Mandatory HMO licence fees vary by council, typically £500 to £1,500 for a 5 year licence. Additional licensing (where applicable) has similar fees. If the property requires planning permission for change of use (C3 to C4, or sui generis for larger HMOs), planning application fees and any required supporting documents (floor plans, fire strategy) add £500 to £2,000.

Regional cost variance

All the figures above vary by region. Labour rates in London are 30 to 40 percent higher than in the North. The Refurb Calculator applies regional adjustments automatically to every rate in your estimate, so the numbers reflect where the property actually is, not a national average.

Schedule of works for HMO projects

If you are funding the conversion with a bridging loan, your lender will require a schedule of works that includes every compliance cost. Fire doors, alarm systems, emergency lighting, and the fire risk assessment must all appear as separate line items with quantities and unit rates. Lenders and their valuers will check that these are accounted for, because without a licence, the property cannot be tenanted or refinanced.