Right, as long as you pass all modules, you get honours, no matter when you pass them (May or August).
In your first year, you're allowed to sit 6 exams in August
In your second (and presumably 3rd-non-final) you're allowed to resit 2, so if you fail 3 in y2, you can only resit 2 and hence only pass 5 in total, losing your honours; this also happens if you fail resits.
You can regain your honours by doing very well in your next year, but I think it's pretty hard to do.