Shocking images have emerged showing back-to-back mattresses crammed into the squalid property in Edgware, with the floor barely visible.
About 40 people, mostly eastern Europeans, were living inside the property before a dawn raid was carried out last month, Harrow Council said.
At the time enforcement officers searched the home 17 people were sleeping on the mattresses.
The council described the conditions as “not safe” and “not sanitary”.
The home was searched on suspicion of overcrowding and being let without a HMO (House of Multiple Occupancy) licence.
A letting agent, which is based in Harrow but has not been named for legal reasons, could now face prosecution.
Cllr Graham Henson, cabinet member for environment, crime and community safety, said: “It’s troubling to see yet another case of overcrowding in Harrow.
“It’s not safe, it’s not sanitary, and it exploits people who deserve somewhere decent to live, just like everyone else. Our licensing scheme is there to ensure incidents like this don’t happen.
“While the majority of landlords and agents operate properly and safety, there are a few who think they can flout the rules.
“We are not afraid to take action – if we suspect foul play or wrongdoing we will carry out raids and will seek to prosecute.”