Yes, it is illegal. That applies whether or not..
.. they are working there at the same time,
.. intercourse is on the menu,
.. any money is involved - thank you, a bit of 1920s class prejudice!
The consequence of all those is that there are a LOT of 'brothels' out there. Fortunately, it's only the people who own / run / 'control' the place who are breaking the law. Anyone who just works there isn't.
Whether or not anyone cares depends on where you are. The first question I used to have to ask when rung up with questions like this is "where are you?" Some police forces went after people subletting their work flat on their day off, other forces would invite the owners of mega-brothels onto committees to help ensure they were run better.
My then local police had a target of raiding a brothel every quarter. There were more than four brothels on our street, never mind the rest of the borough. One was on the front page of a tabloid for a couple of days (some politician met his boyfriend there) but it was never touched and is probably still going.
Now.. hardly anywhere cares unless there is serious other criminality, like underage workers / selling drugs involved.
But one of the basic rules of sex work - don't annoy the neighbours - is particularly important in this context. Piss off enough (or the wrong) neighbours, and even the 'we don't care' police areas will be interested.