Selective licensing: a complete landlord guide

Selective licensing is one of the most significant compliance obligations facing private landlords in England, yet many only discover it exists when their council writes to them. Under Part 3 of the Housing Act 2004, a local authority 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 grown quickly: more than 60 were operating across England in early 2026, and a change that took effect on 23 December 2024, removing the need 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 requiring all landlords letting privately rented residential property within a designated area to hold a licence. It is created under Part 3 of the Housing Act 2004, and it applies to individual properties rather than to landlords as a whole, so 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. It does not apply to social housing managed by the local authority, or to properties already covered by a mandatory or additional HMO licence.

Why councils introduce selective licensing schemes

A council can only designate a selective licensing area if it can demonstrate that the area meets one or more statutory grounds: a significant and persistent problem of low housing demand; a significant and persistent problem of anti-social behaviour that some private landlords are failing to address; a significant proportion of properties in poor condition, particularly against the Housing Health and Safety Rating System; high levels of migration or deprivation creating housing-management challenges; or high levels of crime.

The council must consult for at least ten weeks before designating a scheme, including landlords, tenants, residents and local businesses. Until recently, schemes covering more than 20% of an authority’s geographical area or of its private rented stock also required prior approval from the Secretary of State. That requirement was removed by the General Approval 2024, which came into force on 23 December 2024 and lets councils introduce schemes of any size, up to the whole district, without central sign-off. The ten-week consultation requirement remains. The practical effect for landlords is that schemes are being introduced more quickly, and the position now varies far more from one area to the next.

How selective licensing differs from mandatory and additional HMO licensing

There are three distinct types of property licensing in England, and it helps to understand how they sit together. Mandatory HMO licensing applies nationally to any HMO with five or more people forming two or more households, with no local discretion involved. Additional HMO licensing is a council-created scheme that extends HMO licensing to smaller HMOs in a designated area, but it still applies only to HMOs. Selective licensing is the broadest form: a council-created scheme that applies to all private rented properties, including single lets, within a designated area. If a property already holds a mandatory or additional HMO licence, it is exempt from selective licensing, so a property never needs two licences at once; it needs the appropriate type. Our mandatory HMO licensing guide covers the HMO side in full.

Which areas 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. Examples of authorities with established schemes include Birmingham, Leeds, Salford, Oldham, Bristol, Middlesbrough, Newcastle and Peterborough, along with a number of London boroughs such as Lambeth, Lewisham, Waltham Forest and Westminster. This is not an exhaustive list, schemes are introduced, renewed and allowed to expire regularly, and there is no single national register of them. The only reliable way to confirm whether a specific property is in a designated zone is to search the relevant council’s website, where most provide a postcode checker or interactive map. A portfolio landlord with properties in several areas must check each authority separately.

Who needs a selective licence?

Any person who is the landlord of a privately rented residential property within a designated area must hold a valid licence for it. In most cases the licence holder is the property owner, though an agent can hold it where appropriate arrangements are in place. The requirement applies from the date the designation comes into force. Landlords already letting when a scheme is introduced usually have a short transitional window to apply, but this varies by scheme, so do not assume that continuing an existing tenancy protects you from enforcement.

Properties exempt from selective licensing

A handful of categories are exempt: property managed by a local housing authority or registered social landlord; purpose-built student accommodation managed directly by a higher education institution (a standard buy-to-let let to students is not exempt); property occupied by certain close family members under the narrow definitions in the Act; property already holding a mandatory or additional HMO licence; and property subject to a temporary exemption notice, which gives a short grace period where a property has recently become licensable.

How to apply for a selective licence

Most councils require online applications through a property licensing portal, and the process usually takes between thirty minutes and an hour. You will generally need the licence holder’s personal details; the property details, including the number of storeys and rooms, the maximum permitted occupancy and any managing agent; a current Gas Safety Certificate where applicable; an Electrical Installation Condition Report; a valid EPC; a basic floor plan; managing agent details if relevant; and proof of ownership such as a Land Registry title. The licence holder must also pass a fit and proper person check and confirm awareness of the licence conditions.

Each property requires a separate application and a separate fee. Some councils offer discounts for portfolio landlords applying for several properties at once, but this varies, so check the council’s website before applying.

How much does a selective licence cost?

Fees are set by each council and vary considerably. As a general guide, they typically range from £500 to £1,000 per property for a five-year licence, though some charge above or below this. Fees are usually split into two parts: an application fee paid on submission, often between £100 and £250, which is non-refundable and covers processing and the fit and proper person check; and the balance, paid once the licence is granted. For a property generating £800 a month, a five-year licence costing £750 works out at £150 a year, a little under a week’s rent annually, which is a modest overhead for a single property but adds up for portfolio landlords with properties across several zones.

Is the licence fee tax-deductible?

Yes. Selective licence fees are generally an allowable revenue expense and can be deducted from rental income, since they relate to your letting activity and are not capital in nature. Keep the invoice and proof of payment, and see our guide to allowable expenses for landlords for the full picture.

The fit and proper person test

Every applicant must satisfy the council that they are a fit and proper person to hold the licence, a check that applies to the proposed licence holder and to any managing agent named on the application. The council will consider whether the applicant has been convicted of an offence involving fraud, dishonesty, violence or drugs; found guilty of unlawful discrimination; subject to a banning order under the Housing and Planning Act 2016; found to have breached housing or landlord and tenant legislation, including previous licence conditions; or subject to a civil penalty. A history of housing-related offences is particularly likely to lead to refusal or revocation. If the council is not satisfied, it can refuse the application, grant a licence with extra conditions, or require a different person to be named as licence holder.

What are the licence conditions?

Every selective licence includes mandatory conditions plus any additional conditions the council imposes. Breaching a condition is a criminal offence, not merely a civil matter. The standard mandatory conditions require the licence holder to produce an annual gas safety certificate on request; to keep landlord-supplied electrical appliances and furniture safe and supply a declaration on request; to install and maintain smoke alarms; to demand references from new tenants and use a written tenancy agreement; and to take reasonable steps to deal with anti-social behaviour.

Many councils add further conditions tailored to local concerns, such as providing the tenancy agreement on request, notifying the council of changes in occupancy, attending accreditation training, producing an inventory at the start of each tenancy, installing carbon monoxide alarms, maintaining communal areas, or supplying an emergency contact. Some schemes also require the property to meet the minimum energy efficiency standards. The exact conditions are set out in the licence document, so read them carefully and keep a copy.

How long does a selective licence last?

Selective licences typically run for five years, though a council can grant a shorter licence where it has concerns about the licence holder’s compliance history, where the property has unresolved maintenance issues, or where works have been agreed within a set timeframe. The scheme designation itself also lasts a maximum of five years; to continue beyond that, a council must repeat the full consultation and designation process, including another ten-week consultation. Many schemes are renewed on expiry, and some are not.

What happens if you let without a licence?

Letting in a selective licensing area without a valid licence is a criminal offence under the Housing Act 2004, and the consequences have grown more serious. On conviction in the magistrates’ court there is an unlimited fine. As an alternative to prosecution, the council can issue a civil penalty, and following the Renters’ Rights Act the maximum civil penalty is £40,000 for offences on or after 1 May 2026, up from £30,000. Repeat or serious offenders can also be made subject to a banning order, preventing them from letting any property in England for a period.

Rent repayment orders

The most financially painful consequence is often a Rent Repayment Order. A tenant, or the council on tenants’ behalf, can apply to the First-tier Tribunal for an order requiring the landlord to repay rent received while the property was unlicensed. The Renters’ Rights Act doubled the maximum from twelve to twenty-four months’ rent, so for a property let at £900 a month a successful twenty-four-month order would cost £21,600, on top of any civil penalty, since both can be applied at once.

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 for a Temporary Exemption Notice, which gives a three-month period during which the property is not treated as unlicensed. Only one such notice is normally available per property, after which a full application must follow.

Using a managing agent

If you use a managing agent, their details must appear on the application, but the licence holder remains legally responsible for compliance with the conditions. Delegating day-to-day management does not transfer liability, so make sure your management agreement sets out clearly who is responsible for each condition, and keep copies of all certificates the agent holds for you. Where an agent effectively runs the property, the council may require the agent to be named as licence holder, in which case the agent must also pass the fit and proper person check.

How the Renters’ Rights Act affects selective licensing

The Renters’ Rights Act, whose first phase came into force on 1 May 2026, interacts with selective licensing in several ways, and it is important to understand that it does not replace it. Selective licensing remains a separate local scheme that continues to apply in designated areas.

The Act has already increased landlords’ exposure for letting unlicensed: the civil penalty ceiling has risen to £40,000, and the Rent Repayment Order maximum has doubled to twenty-four months’ rent, with a wider set of circumstances in which an order can be sought. Separately, the Act creates a national Private Rented Sector database on which landlords will have to register their properties. The database is being introduced in a later phase, expected during 2026 rather than from the May commencement date, and is being rolled out in stages. Once it is live it will sit alongside selective licensing rather than replace it, so a landlord in a designated area will need both a selective licence and a database registration. Because councils will be able to cross-reference the database against their licensed properties, enforcement of selective licensing is likely to become considerably more data-driven. For the wider picture, see our Renters’ Rights Act guide.

Practical steps for landlords in selective licensing areas

Check whether each of your properties is in a selective licensing area by searching the relevant council’s website now, rather than waiting to be contacted. Gather the required documents before you start, namely the gas safety certificate, EICR, EPC, floor plan and tenancy agreement, and apply before any transitional deadline. Review the conditions as soon as the licence is issued and make sure your management practices comply, then keep copies of everything and set a reminder around six months before expiry to prepare for renewal. If you use an agent, confirm in writing who is responsible for each condition. Record the licence fee as an allowable expense. And register on the PRS database once it becomes operational, remembering that this is a separate obligation from the licence itself. August’s compliance tools can hold the certificates and prompt the renewal dates that selective licensing relies on.

Frequently asked questions

Can I sell a property with a selective licence? 

Yes, but the licence is personal to the licence holder and does not transfer on sale. The buyer must apply for their own licence before continuing to let, and solicitors acting in selective licensing areas should raise this on the transaction.

What happens at the end of a scheme designation? 

When a five-year designation expires, the requirement to hold a licence ends and licences in force at that point cease to have effect. If the council introduces a new designation, landlords must apply again under it, so check the council’s website as you approach the end of a scheme.

Do I need a licence for each flat in a block I own? 

Yes. Each separately let unit needs its own licence and its own fee, so five let flats in a designated area mean five licences.

Can a selective licence be revoked? 

Yes, if the licence holder is no longer a fit and proper person, if conditions are seriously or repeatedly breached, or if the licence was obtained by deception. Revocation does not remove liability for past breaches.

Is Wales subject to the same rules? 

No. Wales operates Rent Smart Wales under the Renting Homes (Wales) Act 2016, a national registration and licensing scheme rather than a local designation system, so landlords with Welsh property should check those requirements separately.

Will my selective licence be affected by the PRS database? 

The database will sit alongside selective licensing rather than replace it. You will need to register on the database and hold a selective licence where your property is in a designated area, and the database will make it easier for councils to identify unlicensed properties.

Key takeaways

• Selective licensing applies to all private rented properties in a designated area, not just HMOs, and more than 60 schemes were active across England in early 2026.

• Since 23 December 2024, councils no longer need Secretary of State approval for a scheme of any size, so new designations are appearing more quickly.

• Each property in a designated area needs its own five-year licence and fee, typically £500 to £1,000, which is a tax-deductible revenue expense.

• All licence holders must pass a fit and proper person check; an agent can be named, but the landlord keeps responsibility for compliance.

• Letting without a licence risks an unlimited fine on conviction or a civil penalty of up to £40,000 for offences on or after 1 May 2026, plus a Rent Repayment Order of up to 24 months’ rent under the Renters’ Rights Act.

• The Renters’ Rights Act PRS database, expected later in 2026, will sit alongside selective licensing and make enforcement more effective; it does not replace the licence.

• Check each council’s website now to confirm whether your properties are in a designated area, and apply before any transitional deadline.

Selective licensing is not optional, and the penalties for getting it wrong are substantial, up to repaying two years’ rent on top of a civil penalty. The application itself, while bureaucratic, is straightforward once your documents are in order, so the practical advice is simple: check early, track your renewal dates, and make sure your management meets the licence conditions. For your wider obligations, see our Renters’ Rights Act guide.

This article is for general information and does not constitute legal advice. Licensing rules vary by local authority and change over time; the position reflects the law as in force in 2026. For the statutory framework see Part 3 of the Housing Act 2004 and your local council’s scheme. Always take independent advice on your own circumstances.