Selective Licensing: Is Your Area Affected?

Selective licensing is how councils make every rented property in a chosen area need a licence, not just HMOs. If you guess instead of checking, you are gambling with GBP 30,000 fines and 12 months' rent.

"This guide provides general information about UK landlord tax obligations. It is not financial or legal advice. Tax treatment depends on your individual circumstances and may change. Consider consulting a qualified accountant or solicitor for advice specific to your situation."

1. What selective licensing actually is

Law: Housing Act 2004 Part 3 and the Selective Licensing of Houses (Specified Exemptions) (England) Order 2006.

A council can designate an area where all private rented properties (ASTs and licences) must have a selective licence, whether or not they are HMOs.

The goal is to tackle problems linked to the PRS, not just shared houses.

To make a designation under s80 Housing Act 2004, the area must meet one or more statutory conditions

• Low housing demand or risk of becoming low demand.
• Significant and persistent anti-social behaviour (ASB) where some landlords fail to act reasonably.
• Poor property conditions, with council planning inspections and enforcement on lots of PRS homes.
• High migration, with many properties let to migrants and management problems.
• High deprivation.
• High crime linked to poor management of PRS stock.

The 2006 Exemptions Order carves out

• Social housing tenancies.
• Some student halls, business tenancies, and certain long leases.

You still need to licence HMOs separately if mandatory/additional HMO licensing also applies.

2. General Approval 2024: why more areas will be covered

Historically, if a scheme covered more than 20% of the council's area or PRS stock, the council needed specific Secretary of State approval.

From General Approval 2024 (in force from 23 December 2024):

• Councils can now designate schemes covering up to 30% of their geographical area OR 30% of their PRS properties without individual Secretary of State sign-off.
• Above that threshold, they still need specific approval, but the ceiling has risen from 20% to 30%, making larger schemes easier to implement.

Given many urban councils already sit at or above 19% PRS stock, this change makes wide-ranging schemes more likely.

3. Where schemes are live and what they cost

Examples of active / recent large selective schemes (not exhaustive)

• Newham -- borough-wide licensing for most PRS since 2013, current selective scheme covers most wards, fee GBP 750 for 5 years, discounts for accredited landlords and high EPCs.
• Liverpool -- city-wide scheme, selective licence around GBP 680 for 5 years.
• Nottingham -- city selective licensing since 2018, renewed in 2023, individual selective licence GBP 759-1,318 depending on accreditation/compliance.
• Other areas with or planning schemes: Lewisham, Bristol, Wandsworth, Southampton, Barking and Dagenham, Burnley, Blackpool, Middlesbrough, parts of Birmingham, Manchester, Oxford and various northern towns.

Typical fee range (2025-26)

• GBP 500-800 per property for many schemes.
• London and some big cities at GBP 700-900.
• Many councils split fees into Part A (application) and Part B (on grant), with discounts for accredited landlords or early applications.

Licences generally last up to 5 years, but can be shorter for "less compliant" landlords.

Licence conditions usually mirror HMO-style management standards

• Fit and proper person criteria.
• Gas safety, EICR, smoke/CO alarms.
• Property condition and repairs.
• Tenancy management, ASB procedures, deposit protection, Right to Rent.
• Waste management and anti-fly-tipping rules.

4. What happens if you do not licence and how councils catch you

If you let a property in a selective area without a licence (or valid application in progress), you commit an offence under s95 Housing Act 2004.

Sanctions

• Civil penalty up to GBP 30,000 per property instead of prosecution.
• Or criminal prosecution with unlimited fine.
• Rent Repayment Order (RRO):
• Tenants or local authority can recover up to 12 months' rent if you operated without a licence in an area where one was required.

How councils detect unlicensed properties

• Cross-checking electoral roll, Council Tax (single persons discount vs occupancy).
• Data from landlord registration, PRS database rollout, HMRC, benefits claims.
• Scraping letting adverts (Rightmove, SpareRoom, Airbnb) against their licensing register.
• Complaints from neighbours and tenants.
• Inspections triggered by ASB, refuse complaints, or housing condition reports.

They do not need to check "every house"; they use data and complaints to find the soft targets first.

5. How to check if your property is in a scheme and common mistakes

How to check

• Go to your council's website and search "selective licensing" or "property licensing".
• Use any address checker tools they provide (many councils have a postcode lookup).
• Check whether:
• There is a selective licence designation and map.
• Your street/ward is inside the boundary.
• Your tenancy type is exempt (see 2006 Exemptions Order for social housing, etc.).

There is talk of a more comprehensive national database, but for now the council website is the source of truth.

Common mistakes

Assuming "single lets" are safe Selective licensing hits all PRS in the area, not just HMOs. You can be fully compliant on HMO rules and still be unlicensed under selective.

Relying on old 20% rules Many landlords still think "they cannot license more than 20% without SoS approval". General Approval 2024 raised this to 30%, so expect more and larger schemes.

Ignoring consultation notices Councils must consult before designating. If you bin the letters and do not respond, you lose early influence and later cannot plead ignorance.

Confusing HMO, additional and selective Running a 5-bed HMO in a selective area and thinking the HMO licence covers everything; councils often require one licence type per property, but the underlying offences differ.

Not updating when you buy Licence conditions generally attach to the licence holder, not the bricks. If you buy in a selective area, you normally need to apply for your own licence, not rely on the seller's.

Forum myths

"Selective licensing is just a cash grab; they do not enforce." The enforcement toolkit includes GBP 30k civil penalties and RROs. Councils publish cases to make examples. A couple of these wipe out any saving from "avoiding" a GBP 700 licence.

"If my agent did not tell me, it is their problem." You can contract management out, but criminal/civil liability sits with you as landlord or licence holder. Councils and tribunals will not accept "the agent never mentioned it" as a defence.

"Licensing is optional unless they contact me directly." The obligation comes from the designation, not a letter. If the scheme is live and your property is in it, you must apply even if nobody has written to you.

The safest approach is:

• For every purchase or remortgage, run a council licensing check by postcode.
• Keep a portfolio list showing which properties sit in mandatory HMO, additional HMO, selective or no licence areas.
• Budget GBP 500-800 per property every 5 years where selective licensing exists.

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