Landlord licensing in 2026: Which LHAs are adding new schemes

The landscape of landlord licensing is changing faster than at any point in the past decade. In December 2024, the Government removed a significant barrier that had previously constrained local authorities, and the result is predictable. Across England and Wales, councils are moving swiftly to introduce new selective and additional licensing schemes. For landlords, 2026 represents a watershed moment. What was once a compliance obligation affecting some properties in some areas is rapidly becoming the norm.

This article covers everything you need to know about the licensing schemes launching in 2026, which local housing authorities are implementing them, and what this means for your portfolio.

The December 2024 regulatory shift

On 23 December 2024, the Government introduced the Selective Licensing General Approval 2024. This single regulatory change has fundamentally altered the licensing landscape across England.

Previously, under rules introduced in 2015, any local authority wishing to implement a selective licensing scheme covering more than 20% of its geographical area or affecting more than 20% of privately rented homes needed explicit approval from the Secretary of State for Housing, Communities and Local Government. This requirement created a significant bureaucratic hurdle. Applications required detailed evidence, lengthy preparation, and uncertain timelines. Many schemes were rejected or substantially reduced in scope.

The General Approval 2024 removes this requirement entirely. Local authorities in England can now implement selective licensing schemes of any size, covering up to 100% of their area, without seeking central government permission. They must still satisfy all statutory requirements under Part 3 of the Housing Act 2004 and conduct a public consultation of at least 10 weeks, but the decision now rests locally.

The impact has been immediate. Councils that had been preparing applications under the old regime can now proceed directly. Others that might have been deterred by the approval process are reconsidering their options. The result is a significant acceleration in new scheme designations across the country.

Why local authorities are expanding licensing

Local authorities introduce licensing schemes for specific, evidence-based reasons. Under the Housing Act 2004, they can designate areas for selective licensing if the area experiences low housing demand, significant and persistent anti-social behaviour, poor housing conditions, high levels of migration, high levels of deprivation, or high levels of crime.

For additional HMO licensing, councils can require licences for smaller HMOs (typically those occupied by three or four people from multiple households) that don't require mandatory licensing. This is often introduced in areas with high concentrations of shared housing, particularly university towns and urban centres.

The financial penalties for non-compliance provide strong enforcement mechanisms. Councils can issue civil penalties of up to £30,000 per offence, and landlords operating without a required licence cannot serve Section 21 notices during the unlicensed period. Under the Renters Rights Act, which comes into force on 1 May 2026, penalties will increase further. Rent Repayment Orders will extend from 12 to 24 months, potentially doubling the financial exposure for unlicensed landlords.

New schemes launching in 2026

At least sixteen major licensing schemes are scheduled to launch in 2026, with several already confirmed and others in final consultation stages.

London boroughs

Hackney - Both schemes come into force on 1 May 2026. The borough-wide Additional HMO Licensing Scheme applies to all HMOs with three or four people from two or more households. The Selective Licensing Scheme covers privately rented properties occupied by one or two people, or single family households, in 17 out of 21 wards (76% of privately rented homes). Licence fees are £925 for selective licensing and £1,400 for additional HMO licensing, with discounts available for accredited landlords.

Islington - A new selective licensing scheme covering multiple wards is launching in early 2026. The scheme follows consultation completed in late 2025 and targets areas experiencing housing quality issues and anti-social behaviour.

Brent - Extending its existing schemes with additional wards designated for selective licensing. The new designations come into force in spring 2026.

Havering - Introducing selective licensing for the first time in targeted wards. The scheme launches in mid-2026 following a consultation that concluded in December 2025.

Major cities

Leeds - The selective licensing scheme came into force on 9 February 2026. Landlords must apply for a licence by this date or within 14 days of purchasing a property in the designated areas. The scheme covers significant portions of the city, and failure to comply can result in prosecution with an unlimited fine or a civil penalty of up to £30,000. The scheme has faced opposition from landlord groups, with some launching fundraising campaigns to challenge the council's approach.

Reading - Rolling out a borough-wide additional licensing scheme for HMOs from March 2026. The council is also consulting on further selective licensing in additional wards. This represents a significant expansion of licensing coverage across the borough.

Manchester - Expanded its selective licensing scheme in late 2025, adding approximately 1,863 privately rented homes that now require a licence. The expansion was enabled by the relaxed framework and targets specific wards experiencing housing quality issues.

Salford - Introducing new selective licensing designations in spring 2026. The scheme covers multiple wards and follows comprehensive consultation with landlords and residents.

Birmingham - While Birmingham's current selective licensing scheme covering 25 of the city's 69 wards started in June 2023, the council is reviewing potential expansions. Each licence costs £700 and lasts for a maximum of five years.

Other areas

Thurrock - Launching a new selective licensing scheme covering multiple wards in early 2026. The scheme targets areas with concentrations of privately rented properties and evidence of housing quality concerns.

Westminster - Extended coverage to fifteen wards, with licences required from November 2025. This expansion significantly increases the number of properties requiring licensing in central London.

Barking & Dagenham and Bexley - Both introduced new schemes under the relaxed framework in late 2025, with full implementation continuing through early 2026.

Wales - Different rules, same direction

Wales operates under separate legislation. The Housing (Wales) Act 2014 introduced Rent Smart Wales, which requires all landlords and letting agents operating in Wales to register and obtain a licence. This is a national scheme rather than discretionary local schemes.

However, Welsh local authorities can still introduce additional licensing for HMOs. Swansea, for example, renewed its Additional HMO Licensing scheme for Castle, Uplands, Waterfront and St Thomas Wards, with the new scheme coming into effect from February 2026. HMO licences issued under the previous scheme are being passported through to the new scheme.

The Welsh Government is also consulting on establishing a statutory licensing scheme for all visitor accommodation in Wales, which would affect landlords operating short-term holiday lets.

Understanding scheme types

The terminology can be confusing, so it's worth clarifying the three main types of licensing that landlords may encounter.

1. Mandatory HMO licensing - This applies across all of England and Wales. Any HMO occupied by five or more people forming more than one household requires a mandatory licence. This is not discretionary and has been in place since 2006.

2. Additional HMO licensing - Local authorities can extend licensing requirements to smaller HMOs, typically those with three or four occupants from multiple households. This is discretionary and must be designated for specific areas. Schemes last for a maximum of five years and can be renewed.

3. Selective licensing - This applies to all privately rented properties in a designated area, regardless of whether they are HMOs. It's used to address area-specific issues such as anti-social behaviour, poor housing conditions, or low demand. Properties require individual licences even if they're let to single households or families.

Licence conditions and compliance obligations

While conditions vary by local authority, most licensing schemes impose similar core requirements on landlords.

You must demonstrate that you are a "fit and proper person" to hold a licence. This assessment considers any unspent criminal convictions, history of unlawful discrimination, breaches of housing or landlord-tenant law, and evidence of poor property management. Any proposed manager must also meet these standards.

Properties must meet minimum room size standards. For HMOs, a bedroom used by one adult must measure at least 6.51 square metres, while a room for two adults must be at least 10.22 square metres.

Fire safety requirements are stringent, particularly for HMOs. You'll need to fit interlinked smoke alarms on every floor, provide fire doors with self-closers where required, maintain clear escape routes, and conduct regular fire safety risk assessments. Emergency lighting may be required in common areas of larger HMOs.

You must provide valid Gas Safety Certificates (if there's a gas supply), an Electrical Installation Condition Report (EICR) (typically valid for five years), and an Energy Performance Certificate (EPC) rated E or above.

Many schemes require regular property inspections with written records maintained. Quarterly inspections are common for selective licensing schemes. You must keep records of inspection findings, conditions noted, and actions taken, and make these available to authorised officers on request.

Waste management is another common condition. You must ensure suitable provision for storage and collection of waste, including the correct type and number of bins, and ensure all waste complies with the council's disposal and recycling requirements.

Anti-social behaviour clauses require landlords to take reasonable steps to prevent anti-social behaviour by occupiers or visitors. This might include informing appropriate authorities where criminal activity is suspected and maintaining clear communication channels with tenants about behavioural expectations.

Application processes and fees

The application process varies by local authority, but most now offer online applications through dedicated property licensing portals. You'll typically need to provide detailed property information including floor plans showing room layouts and dimensions, location of facilities, and fire safety measures.

Management details must include information on all parties involved, such as landlords, agents, and freeholders. You'll need tenancy agreements, repair and maintenance contact details, and evidence of tenant referencing procedures.

Compliance documentation is extensive. Expect to submit your current Gas Safety Certificate, EICR, EPC, proof of buildings insurance, and evidence of appliance safety where relevant.

Licence fees vary significantly across the country. In London, fees tend to be highest. Hackney charges £925 for selective licensing and £1,400 for additional HMO licensing. Waltham Forest charges £895 for selective licensing. Birmingham charges £700 for selective licensing outside London. Leeds' fees vary depending on property type and accreditation status.

Most councils split fees into two parts, with part one paid on application and part two paid before the licence is issued. This allows costs to be spread over several months. Discounts are commonly available for landlords who hold accreditation through recognised schemes such as the London Landlord Accreditation Scheme or National Residential Landlords Association (NRLA).

Applications should be submitted before the scheme comes into force. If you purchase a property in a licensed area after the scheme starts, you typically have 14 days to apply. Processing times vary, but councils aim to issue draft licences within a few months of receiving complete applications.

The Renters Rights Act connection

The Renters Rights Act, which comes into force on 1 May 2026, will interact with licensing schemes in several important ways.

The Act introduces a national Private Rented Sector Database. All landlords in England will need to register their properties. While this won't replace local licensing schemes, the Government has confirmed that selective licensing should complement and align with the database. The database will make it significantly easier for councils to identify unlicensed properties, improving enforcement capabilities.

Penalties for unlicensed properties will increase. Rent Repayment Orders, which allow tenants to claim back rent when landlords have committed licensing offences, will extend from 12 to 24 months. This potentially doubles the financial penalty for operating without a licence.

The Act also brings important changes for rent-to-rent arrangements. Previously, superior landlords were sometimes protected from licensing responsibilities. The new amendments will make superior landlords jointly liable for licensing failures by management companies, including fines and rent repayment orders.

Checking your licensing obligations

Given the rapid expansion of licensing schemes, checking your obligations is not optional. The consequences of getting this wrong are severe, and ignorance is not a defence.

Start by contacting your local council's private housing team. Most councils provide online resources or postcode lookup tools that allow you to check whether your property falls within a licensing area. Some maintain interactive maps showing designated zones.

Check whether your property qualifies as an HMO. Remember, an HMO is typically a property occupied by three or more people who form more than one household and who share amenities such as a kitchen or bathroom. If you're letting to unrelated individuals on separate tenancy agreements, you almost certainly have an HMO.

Verify the type of scheme in your area. Is it selective licensing (affecting all private rented properties), additional licensing (affecting smaller HMOs), or both? The requirements and conditions may differ.

Review current schemes with expiry dates. Some schemes introduced five years ago are now expiring and being renewed, sometimes with changed conditions or fees. Don't assume that because you had a licence for a previous scheme, you're automatically covered under the renewal.

Consider schemes in consultation. If your local authority is consulting on a new scheme, pay attention. The consultation period is your opportunity to understand what's being proposed and to provide feedback, but the scheme will likely proceed regardless.

Managing compliance efficiently

For landlords with multiple properties across different local authorities, managing licensing compliance can become complex. The requirements, conditions, and renewal dates vary by area, and keeping track manually is challenging.

This is where tools like August prove invaluable. Designed specifically for landlords, August allows you to store all compliance documents in one place, track licence renewal dates, set reminders for expiry dates, and maintain organised records for inspection.

For HMO landlords especially, staying organised is not optional. Between licensing requirements, multiple tenants, regular inspections, and complex compliance obligations, a robust system saves time and reduces risk.

Create a central licensing register for your portfolio. Record which properties require licensing, what type of licence is needed, the local authority responsible, the application date, the licence issue date and expiry date, and the licence number and conditions.

Set up renewal reminders well in advance. Most licences last for five years, but renewal applications often need to be submitted months before expiry. Missing a renewal deadline can leave you operating unlicensed, with all the associated penalties.

Maintain complete documentation for each licensed property. This includes the licence itself, all certificates (gas, electrical, EPC), inspection records, tenant communications about licensing, and evidence of compliance with licence conditions.

Financial planning considerations

Licensing adds to the cost of being a landlord, and these costs need to be factored into your investment calculations. Beyond the licence fees themselves, there are indirect costs to consider.

Property improvements may be required to meet licensing standards. Fire doors, alarm systems, improved kitchen facilities, or remedial works to meet minimum room sizes can all require significant investment. Budget for these expenses when planning to license a property or when purchasing in a licensed area.

Professional fees often increase. You may need safety certificates, compliance surveys, or professional advice to complete applications correctly. Some landlords use specialist licensing consultants to manage the process, particularly when dealing with complex portfolios across multiple authorities.

Compliance time represents an opportunity cost. Preparing applications, arranging inspections, coordinating with councils, and maintaining records all require time. For professional landlords, this is time that could be spent on other portfolio activities.

The risk of penalties must be considered. Operating without a licence can result in fines of up to £30,000, rent repayment orders potentially covering 24 months of rent, and inability to serve possession notices. The financial exposure is substantial.

However, licensing also creates competitive advantages for compliant landlords. Licensed properties may command slightly higher rents as tenants gain confidence in standards. You gain protection against rogue operators who undercut the market with substandard properties. Licensing can reduce void periods as properties on approved lists attract more interest. Many councils maintain public registers of licensed properties, which can serve as a form of quality endorsement.

Opposition and challenges

The expansion of licensing schemes has not been without controversy. Landlord groups have mounted challenges in several areas, arguing that schemes are burdensome, expensive, and ineffective at targeting rogue operators.

In Leeds, landlords launched a fundraising campaign to challenge the council's selective licensing scheme, arguing it penalises compliant landlords while failing to address the root causes of poor housing. Great Yarmouth landlords won backing from their local MP to pause the council's upcoming scheme.

The National Residential Landlords Association (NRLA) and Propertymark have consistently argued that licensing is not the most effective way to improve housing standards. They advocate for more targeted, intelligence-led enforcement and better collaboration with professional landlords and letting agents.

Propertymark has specifically objected to Hackney's proposed schemes, arguing they risk duplicating the national PRS database and that fees (£925 per property) are significantly higher than the previous pilot scheme and above neighbouring boroughs. They've called for lower fees in line with comparable areas and better discounts for properties managed by accredited agents.

The Government maintains that licensing is a valuable local tool for addressing area-specific housing issues and that the relaxation of approval requirements simply empowers councils to address problems more effectively. Matthew Pennycook MP, Minister for Housing and Planning, has confirmed that selective licensing should complement rather than duplicate the national database.

Looking ahead

The regulatory direction is clear. Licensing is expanding, not contracting. The removal of the 20% threshold means councils now have the autonomy to designate large areas or even entire boroughs without central government oversight. More schemes will follow throughout 2026 and beyond.

For landlords, the question is no longer whether to engage with licensing, but how to do so efficiently and cost-effectively. Those who treat licensing as a compliance burden to be minimised will find themselves at a disadvantage. Those who embrace it as a standard cost of professional operation and use it to differentiate themselves from less sophisticated competitors will be better positioned.

The expansion of licensing also creates opportunities for consolidation. Larger, more professional landlords with robust systems can manage compliance across multiple areas more efficiently than smaller operators. This may accelerate the ongoing professionalisation of the sector.

Technology will play an increasingly important role. Tools that help landlords track licensing obligations, manage renewals, and maintain compliance records across portfolios will become essential rather than optional. The landlords who invest in these systems now will find themselves better prepared as schemes continue to proliferate.

Ultimately, licensing is part of a broader shift towards a more regulated, more professional private rented sector. The Renters Rights Act, the national landlord database, the Decent Homes Standard enforcement from 2035, and expanding local licensing schemes are all moving in the same direction. The successful landlord in this environment will be someone who stays informed, maintains meticulous records, invests appropriately in property standards, and views compliance as a competitive advantage rather than a burden.

Practical next steps

If you're a landlord operating in England or Wales, take action now to understand your licensing obligations.

Check your local authority's website for current and proposed licensing schemes. Most councils maintain dedicated property licensing pages with interactive maps and application portals.

Sign up for local authority updates and newsletters. Many councils offer specific landlord licensing newsletters that provide early notice of consultations and scheme changes.

Join landlord forums or accreditation schemes. Beyond the fee discounts, these often provide valuable early warnings about regulatory changes and practical guidance on compliance.

Audit your portfolio systematically. Create a spreadsheet listing each property, its location, whether it's an HMO, current licensing status, and any actions required. Work through this methodically.

Set calendar reminders for all critical dates including licence expiries, renewal deadlines, and consultation closing dates.

Budget appropriately for licensing costs in your 2026 financial planning. Include licence fees, potential property improvements, and professional fees for certificates and surveys.

If you're purchasing property in 2026, factor licensing into your due diligence. Check whether the area has current or proposed schemes and adjust your investment calculations accordingly.

Above all, don't wait for enforcement action to prompt compliance. Councils are becoming more sophisticated at identifying unlicensed properties, and the penalties for non-compliance are substantial. The landlords who get ahead of this trend will be the ones who thrive in the increasingly regulated market of 2026 and beyond.

Disclaimer: This article is a guide and not intended to be relied upon as legal or professional advice, or as a substitute for it. August does not accept any liability for any errors, omissions or misstatements contained in this article. Always speak to a suitably qualified professional if you require specific advice or information.