Compliance & Safety Certificates
Selective licensing: a complete landlord guide
Selective licensing is one of the most significant compliance obligations facing private landlords in the UK, yet many rental property owners only discover it exists when their local council writes to them. Under Part 3 of the Housing Act 2004, local authorities can designate areas where every privately rented property must be licensed, regardless of its size or how many people live there. The number of active schemes has been growing rapidly. As of 2026 there are over 60 across England alone, and a regulatory change in December 2024 that removed the requirement for Secretary of State approval has made it much easier for councils to introduce new ones. This guide explains how selective licensing works, who needs a licence, how to apply, what the conditions involve, and what happens if you let in a licensed area without one.
What is selective licensing?
Selective licensing is a local authority scheme that requires all landlords letting privately rented residential properties within a designated area to hold a licence. The scheme is created under Part 3 of the Housing Act 2004, and it applies to individual properties rather than to landlords as a whole. A landlord with five properties in a selective licensing zone needs five separate licences.
Unlike mandatory HMO licensing, which applies only to larger houses in multiple occupation, selective licensing covers all categories of private rented property in the designated area, including single-let houses, flats, maisonettes, and smaller HMOs that do not require a mandatory HMO licence. The scheme does not apply to social housing managed by the local authority or to properties already covered by a mandatory or additional HMO licence.
Why do councils introduce selective licensing schemes?
A local authority can only designate a selective licensing area if it can demonstrate that the area meets one or more of the following statutory grounds:
Low housing demand - The area is experiencing or likely to experience a significant and persistent problem of low housing demand, including empty properties, and the licensing scheme will help address it.
Anti-social behaviour - The area is experiencing a significant and persistent problem caused by anti-social behaviour, some or all private sector landlords are failing to take action to combat it, and the scheme will help tackle the problem.
Poor property conditions - A significant proportion of properties in the area are in poor condition, particularly where properties do not meet the Housing Health and Safety Rating System (HHSRS) standards.
High levels of migration or deprivation - The area has experienced or is experiencing a significant change in the proportion of residents who have moved into the area, or who have left, creating challenges for housing management.
High crime rates - The area is experiencing high levels of crime, and the scheme will help reduce crime in the area.
The council must carry out a consultation of at least 10 weeks before designating a scheme, including consulting landlords, tenants, residents, and local businesses. Previously, schemes covering more than 20% of an authority's private rented stock required prior approval from the Secretary of State. That requirement was removed in December 2024, meaning councils can now introduce large-scale schemes without central government sign-off. This change has accelerated the pace at which new schemes are being introduced. The challenge to this change for landlords is keeping up with developments in the areas where your rental portfolio operates as these differences become wider between local areas.
How selective licensing differs from mandatory and additional HMO licensing
There are three distinct types of property licensing in England and Wales, and it is important to understand how they interact:
Mandatory HMO licensing - Applies nationally to any HMO with five or more people forming two or more households. No local authority discretion is involved. If your property meets this definition, it needs a mandatory HMO licence regardless of where it is.
Additional HMO licensing - A council-created scheme that extends HMO licensing to smaller HMOs in a designated area. It requires local authority designation, but applies only to HMOs, not to single-let properties.
Selective licensing - A council-created scheme that applies to all private rented properties (including single lets) within a designated area. It is the broadest form of licensing and is the focus of this guide.
If a property already holds a mandatory or additional HMO licence, it is exempt from selective licensing. A landlord operating a property in an area covered by both additional HMO licensing and selective licensing only needs to hold one licence, but it must be the appropriate type for the property.
Which areas currently have selective licensing schemes?
Selective licensing is concentrated in urban areas with higher proportions of private rented housing, particularly in northern England, London, and parts of the Midlands. As of early 2026, more than 60 active selective licensing schemes are operating across England. Some of the local authorities with well-established schemes include:
Birmingham City Council (several designated zones)
Leeds City Council (East, South, and West Leeds zones introduced in early 2026)
Salford City Council
Oldham Council
London boroughs including Lambeth, Lewisham, Waltham Forest, and Westminster
Bristol City Council (various zones)
Middlesbrough Council
Newcastle City Council
Peterborough City Council
Thurrock Council (recently introduced)
This is not an exhaustive list, and new schemes are being introduced regularly. The only reliable way to check whether a specific property is in a selective licensing area is to search the relevant local authority's website. Most councils provide a postcode checker or interactive map. There is currently no single national register of all active schemes.
Checking whether your property requires a licence
Search your local council's website for "selective licensing" or "property licensing". If a scheme is active in your area, the council's page will usually include an interactive map or a postcode checker that allows you to confirm whether your property falls within a designated zone. If you are a portfolio landlord with properties in multiple areas, you will need to check each local authority separately, as there is no cross-authority register.
Who needs a selective licence?
Any person who is the landlord of a privately rented residential property within a designated selective licensing area must hold a valid licence for that property. In most cases, the licence holder is the property owner, but the licence can be held by an agent if appropriate arrangements are in place.
The requirement applies from the date the scheme designation comes into force. Landlords who are already letting a property when a new scheme is introduced typically have a short transitional window to apply, but this varies by scheme. Do not assume that continuing an existing tenancy without applying protects you from enforcement action.
Properties that are exempt from selective licensing
The following categories of property are exempt from selective licensing:
Properties managed by a local housing authority - Socially rented homes managed by the council or a registered social landlord are excluded.
Student accommodation where the university is the landlord - Purpose-built student accommodation managed directly by a higher education institution is exempt. Standard buy-to-let properties let to students are not exempt.
Properties occupied by a family member - Where the landlord's close family members are tenants under specific definitions in the Act. The exemption is narrow: it does not cover all family relationships.
Properties already holding an HMO licence - A mandatory or additional HMO licence replaces the need for a selective licence. A landlord in a selective licensing area who holds an HMO licence for a property does not need a separate selective licence for that property.
Properties subject to a temporary exemption notice - Where a property has recently become a licensable property (for example, on inheritance), the owner can apply for a temporary exemption notice giving a short grace period of three months.
How to apply for a selective licence
Most councils require applications to be submitted online through their property licensing portal. The process typically takes between 30 minutes and an hour to complete. Here is what you will generally need:
Personal details - Full name, address, contact information, and date of birth for the proposed licence holder.
Property details - Full address, number of storeys, number of rooms, the maximum permitted occupancy, and details of any managing agent.
Proof of gas safety - A current Gas Safety Certificate (CP12) issued by a Gas Safe registered engineer within the last 12 months, where applicable.
Electrical installation report - An Electrical Installation Condition Report (EICR) carried out by a qualified electrician.
Energy Performance Certificate - A valid EPC for the property.
Floor plan - A basic floor plan or layout of the property showing room dimensions and usage.
Managing agent details - If a managing agent is involved, their details including their contact information and any relevant qualifications or accreditations.
Proof of property ownership - Evidence such as a Land Registry title or mortgage statement confirming ownership.
The licence holder must pass a fit and proper person check (described below). You will also be asked to confirm that you are aware of and will comply with the licence conditions.
Applying for multiple properties
Each property requires a separate application and a separate licence fee. Some councils offer bulk discounts for portfolio landlords applying for five or more properties simultaneously, but this varies. Check the specific council's website for any portfolio arrangements before applying.
How much does a selective licence cost?
Licence fees are set by each local authority and vary considerably across England and Wales. As a general guide, fees typically range from £500 to £1,000 per property for a five-year licence, though some councils charge above or below this range.
Fees are usually split into two payments:
Application fee (Part 1) - Paid when the application is submitted. This fee is non-refundable and covers the cost of processing the application, conducting the fit and proper person check, and considering the licence. It is typically between £100 and £250.
Licence fee (Part 2) - Paid once the licence has been granted. This represents the balance of the total fee. It is forfeit if the licence is later revoked for non-compliance.
For a property worth around £150,000 generating £800 per month in rent, a five-year licence costing £750 represents a cost of £150 per year, or roughly one week's gross rent over the licence period. This is not an unreasonable overhead for most landlords, but it adds up quickly for portfolio landlords with properties spread across several selective licensing zones.
Is the licence fee tax-deductible?
Yes. Selective licence fees are generally treated as an allowable revenue expense and can be deducted from rental income when calculating your tax liability. The fees relate to your letting activity and are not capital in nature. Keep the invoice and proof of payment as part of your records. See our guide to allowable expenses for landlords for a full breakdown of what you can and cannot deduct.
The fit and proper person test
Every applicant for a selective licence must satisfy the council that they are a fit and proper person to hold the licence. This is a mandatory check that applies to the proposed licence holder and, where relevant, to any managing agent named on the application.
The council will assess whether the applicant has been:
Convicted of any offence involving fraud or dishonesty
Convicted of any offence involving violence or drugs
Found guilty of unlawful discrimination on grounds of sex, colour, race, ethnic origin, or nationality
Subject to a banning order under the Housing and Planning Act 2016
Found to have contravened housing or landlord-tenant legislation, including previous breaches of licence conditions
Subject to a civil penalty under any landlord and tenant legislation
A history of housing-related offences is particularly likely to result in licence refusal or revocation. Councils can also consider other relevant matters at their discretion. If the council is not satisfied that the applicant is a fit and proper person, it can refuse the application or grant a licence with additional conditions, or it can require a different person to be named as licence holder.
What are the licence conditions?
Every selective licence includes a set of mandatory conditions, as well as any additional conditions the council decides to impose specific to the property or the area. Breaching a licence condition is a criminal offence, not just a civil matter.
Standard mandatory conditions
All selective licences must include the following conditions:
Gas Safety Certificate - The licence holder must produce an annual Gas Safety Certificate and make it available to the council on request. See our guide to gas safety obligations for more detail.
Electrical appliances and furniture - All electrical appliances and furniture supplied by the landlord must be kept in a safe condition, and the licence holder must supply a declaration of safety on request.
Smoke alarms - Smoke alarms must be installed and maintained in working order. For further detail on the specific rules, see our article on smoke alarm regulations in rental properties.
Tenancy agreement - The licence holder must demand references from new tenants and use a written tenancy agreement.
Anti-social behaviour - The licence holder must take reasonable and practicable steps to address anti-social behaviour by tenants and visitors.
Common additional conditions
Many councils add further conditions tailored to local concerns. Common additional conditions include:
Providing a copy of the tenancy agreement to the council on request
Informing the council of any change in occupancy or any tenancy that has come to an end
Attending landlord accreditation training
Producing an up-to-date inventory or schedule of condition at the start of each tenancy
Installing carbon monoxide alarms in rooms with solid fuel-burning appliances
Maintaining any communal areas in a safe and clean condition
Providing the council with contact details for an emergency contact or managing agent
Many selective licensing schemes require your property to meet MEES minimum energy efficiency standards. The specific conditions attached to your licence will be set out in the licence document issued by the council. Read them carefully and retain a copy.
How long does a selective licence last?
Selective licences typically run for five years, though councils have discretion to grant shorter licences where there are concerns about the property or the licence holder. A licence can be granted for a shorter period where:
The council has concerns about the licence holder's compliance history
The property has outstanding maintenance issues that have not yet been resolved
The licence holder has agreed to carry out works within a specific timeframe
The scheme designation itself also has a maximum lifespan. A selective licensing designation expires five years after it comes into force. A council wishing to continue the scheme beyond five years must go through the full consultation and designation process again, including another 10-week consultation. Many schemes are renewed on expiry; some are not.
What happens if you let without a licence?
Letting a property in a selective licensing area without a valid licence is a criminal offence under the Housing Act 2004. The consequences are severe and have been made more so by recent legislative changes.
Financial penalties
Unlimited fine - On conviction in a magistrates' court, there is no upper limit on the fine that can be imposed. This replaces the previous maximum of £20,000.
Civil penalty up to £30,000 - As an alternative to prosecution, the local authority can issue a civil penalty notice. The maximum is £30,000 per property. For offences on or after 1 May 2026, this cap increases to £40,000 under changes brought in by the Renters' Rights Act.
Banning order - Repeat offenders or those with serious non-compliance histories can be made subject to a banning order, which prevents them from letting any property in England for a specified period and is recorded on the national database of rogue landlords.
Rent repayment orders
This is perhaps the most financially painful consequence for landlords. A tenant (or the local authority on behalf of tenants) can apply to the First-tier Tribunal for a Rent Repayment Order (RRO). If granted, the landlord must repay rent received during the period the property was unlicensed.
Currently, tenants can claim back up to 12 months of rent through an RRO. When the Renters' Rights Act comes into force on 1 May 2026, this will increase to 24 months. For a property renting at £900 per month, a successful 24-month RRO would cost the rental owner £21,600. This is on top of any civil penalty, and both can be applied simultaneously.
For more on rent-related disputes, see our guide to rent arrears and what landlords can do.
The temporary exemption notice
If a property becomes licensable and you are not immediately ready to apply (for example, because you have just inherited it), you can apply to the council for a Temporary Exemption Notice (TEN). This gives a three-month breathing space during which the property is not treated as unlicensed. You can only apply for one TEN per property (in some circumstances a second can be granted), after which a full licence application must be submitted.
Using a managing agent in a selective licensing area
If you use a managing agent, their details must be provided on the licence application. However, the licence holder remains legally responsible for compliance with the licence conditions. Delegating day-to-day management to an agent does not transfer liability if a condition is breached. Make sure your management agreement with the agent clearly sets out their responsibilities in relation to licence compliance, and retain copies of all certificates and documents they hold on your behalf.
In some cases, councils require the person named as the licence holder to be the person actively managing the property. Where a managing agent is effectively running the property on a day-to-day basis, the council may ask the agent to be named as the licence holder, which means they must also pass the fit and proper person check.
How the Renters' Rights Act affects selective licensing
The Renters' Rights Act, expected to come into force from 1 May 2026, introduces significant changes to the private rented sector that interact with selective licensing in several important ways.
PRS database - The Act creates a mandatory Private Rented Sector (PRS) database on which all landlords must register their properties. This database will be visible to local authorities and will make it significantly easier for councils to identify properties in selective licensing areas that do not hold a valid licence. Landlords should assume that enforcement will become more data-driven and proactive as the database is populated.
Rent repayment orders extended to 24 months - As noted above, the RRO limit doubles from 12 to 24 months once the Act is in force. This substantially increases the financial exposure of unlicensed landlords.
Higher civil penalties - The maximum civil penalty for letting without a licence increases to £40,000 for offences on or after 1 May 2026.
Wider RRO eligibility - The Act broadens the circumstances in which an RRO can be sought. Landlords operating without a licence are among the priority targets for RRO applications under the expanded regime.
For a full overview of the Act's impact on landlords, see our guide to the Renters' Rights Act post-commencement guide.
Practical steps for landlords in selective licensing areas
Check whether your property is in a selective licensing area by searching your local council's website now. Do not wait for the council to contact you.
Gather all required documents before starting the application: gas safety certificate, EICR, EPC, floor plan, and tenancy agreement.
Apply before any transitional deadline. If a new scheme has just been introduced, check the council's website for the deadline for existing landlords to apply.
Review the licence conditions as soon as the licence is issued and ensure your property and tenancy management practices comply.
Keep copies of all licence documents and renewal reminders, as licences must be renewed on expiry. Set a reminder 6 months before expiry to prepare for renewal.
If you use a managing agent, confirm in writing who is responsible for each licence condition and how compliance will be evidenced.
Add the licence fee to your annual accounts as an allowable revenue expense.
Register on the PRS database when it becomes operational. This is a separate obligation from the selective licence itself.
Frequently asked questions
Can I sell a property with a selective licence?
Yes. The property can be sold, but the selective licence is personal to the licence holder and does not transfer to the buyer on sale. The new owner will need to apply for their own licence before continuing to let the property. If the sale completes during the current tenancy, the buyer should apply as soon as they complete the purchase. Solicitors acting on property transactions in selective licensing areas should raise this as a requisition.
What happens at the end of a scheme designation?
When a five-year designation expires, the requirement to hold a licence ends. Any licences in force at the time of expiry cease to have effect. If the council introduces a new designation, landlords will need to apply again under the new scheme. Check the council's website regularly if you are approaching the end of a scheme period.
Do I need a licence for each flat in a block I own?
Yes. Each separately let residential unit requires its own selective licence. If you own and let five flats in a block within a selective licensing area, you need five licences and will pay five application fees.
Can a selective licence be revoked?
Yes. The council can revoke a licence if the licence holder is no longer a fit and proper person, if the licence conditions have been seriously or repeatedly breached, or if the licence was obtained by deception or misrepresentation. Revocation does not relieve the landlord of liability for past breaches; it simply means the licence ceases to be valid and further letting without applying for a new licence would constitute an offence.
Is Wales subject to the same rules?
Wales has its own licensing framework under the Renting Homes (Wales) Act 2016 and the Rent Smart Wales scheme, which requires all landlords to be registered and all letting activity to be conducted by a licensed landlord or agent. This is a national scheme rather than a local designation-based system and operates differently from selective licensing in England. Landlords with properties in Wales should check the Rent Smart Wales requirements separately.
Will my selective licence be affected by the PRS database?
The PRS database will sit alongside selective licensing rather than replacing it. Landlords will need to register on the database and hold a selective licence if their property is in a designated area. The database will make enforcement of selective licensing requirements significantly more straightforward for councils, since they will be able to cross-reference registered properties against licensed properties.
Key takeaways
Selective licensing applies to all private rented properties in a designated area, not just HMOs. Over 60 schemes are currently active in England, with more being introduced regularly.
Since December 2024, councils no longer need Secretary of State approval for any size of scheme, making it easier for local authorities to introduce new designations.
Each property in a selective licensing area requires its own licence. There is no portfolio licence.
Fees typically range from £500 to £1,000 per property for a five-year licence and are split into two parts: on application and on grant. The fee is a tax-deductible revenue expense.
All licence holders must pass a fit and proper person check. A managing agent can be named on the licence but the landlord retains responsibility for compliance.
Letting without a licence exposes you to an unlimited fine or a civil penalty of up to £30,000 (rising to £40,000 from 1 May 2026), plus a rent repayment order of up to 24 months' rent under the Renters' Rights Act.
The PRS database, coming in May 2026, will make enforcement significantly more effective by allowing councils to identify unlicensed properties more easily.
Check your local council's website now to confirm whether any of your properties are in a selective licensing area, and apply before any transitional deadline expires.
Selective licensing is not optional and the penalties for non-compliance are substantial. A landlord who lets in a designated area without a licence faces not only heavy fines but potentially repaying two years' worth of rent. The good news is that the application process, while bureaucratic, is straightforward if you have your documents in order. Act early, stay on top of renewal dates, and ensure your property management practices meet the conditions in the licence.
For more on your overall compliance obligations, see our landlord compliance calendar and our overview of the Renters' Rights Act and what it means for landlords in 2026.
This article is intended for general informational purposes only and does not constitute legal, financial, or professional advice. Landlord and tenant law is subject to change, and the information in this article reflects the position at the time of writing. You should always seek independent legal or professional advice before taking any action in relation to your property or tenancy.
Author
August Logo
The August editorial team lives and breathes rental property. They work closely with a panel of experienced landlords and industry partners across the UK, turning real-world portfolio and tenancy experience into clear, practical guidance for small landlords.
