Selective Licensing: What Private Landlords Must Know

Selective licensing is a discretionary power granted to local housing authorities under Part 3 of the Housing Act 2004. It allows councils to require all private landlords in a designated area to hold a licence before renting out their property. Unlike mandatory HMO licensing, which applies nationally to large HMOs, selective licensing applies to ordinary single-household dwellings and is specific to the local areas where councils have decided the PRS needs closer regulation.

What is selective licensing and why do councils use it?

Councils can designate a selective licensing area where one or more of the following statutory conditions apply: the area is experiencing low housing demand; the area has significant anti-social behaviour problems; the area has poor property conditions in the private rented sector; the area has high levels of deprivation or crime; or the area has a high proportion of migrants. The designation must be approved by the Secretary of State (or confirmed through a local authority process) where it covers more than 20% of the local authority's housing stock or more than 20% of the local authority area.

• Low demand areas: Areas with significant vacant properties or declining rental demand, selective licensing helps enforce minimum management standards
• ASB hotspots: Areas with documented anti-social behaviour attributable to the private rented sector, councils use licensing conditions to impose management obligations on landlords
• Deprivation and crime: Areas with multiple deprivation indicators, licensing supports enforcement of HHSRS and basic property standards
• High migrant concentration: Areas where a high migrant population has resulted in specific management or health and safety pressures in the PRS
• Poor property conditions: Areas where the PRS stock falls significantly below acceptable standards, licensing enables proactive inspection and enforcement

How does a landlord find out if their property needs a selective licence?

Selective licensing designations are made by individual local authorities and vary enormously across England. There is no single national register of all active selective licensing areas. Landlords must:

1. Check the local council's website for current and proposed licensing designations
2. Call the private sector housing team directly to confirm the designation status for their specific property address
3. Check for proposed new designations, councils must consult before creating a new scheme and landlords in consultation areas should respond and plan for compliance
4. Review the designation end date, selective licensing schemes have a maximum 5-year duration and must be renewed if the council wishes to continue

What does a selective licence application require?

Applications for selective licences must be made to the local council before a tenancy is granted in a designated area. Councils set their own application requirements, but standard documentation includes:

• Fit and proper person declaration: The landlord (and any managing agent) must declare they are a fit and proper person. Disqualifying factors include criminal convictions for fraud, violence, or drug offences; previous adverse licensing decisions; and civil penalties for housing offences
• Energy Performance Certificate (EPC): A valid current EPC for the property. Selective licensing applications in most councils require the property to meet at least EPC Band E
• Gas Safety Certificate: A current gas safety certificate (CP12) from a Gas Safe registered engineer where the property has gas appliances
• Electrical Installation Condition Report (EICR): A current EICR from a qualified electrician, demonstrating the installation is satisfactory
• Management plan: Many councils require a written property management plan describing how the landlord will manage the property, respond to tenant complaints, and handle anti-social behaviour
• Application fee: Selective licence fees vary significantly by council, typically between £300 and £900 per property for a 5-year licence

Selective licence conditions, what landlords must do

Once a selective licence is granted, it comes with conditions that the landlord must comply with throughout the licence term. Breach of a licence condition is a criminal offence. Standard conditions include:

• Maintain gas and electrical safety: Annual gas safety inspections and 5-yearly EICR renewal are mandatory; as they are under housing regulations generally, but licence conditions make non-compliance also a licensing breach
• Smoke and carbon monoxide alarms: Compliant smoke alarms on every floor and CO alarms where solid fuel appliances are used
• Tenant reference checks: Many councils require landlords to take up references before granting a tenancy and retain records for inspection
• Anti-social behaviour management: Licence conditions often require landlords to take reasonable and practical steps to address ASB by their tenants and to cooperate with the council's enforcement team
• Tenancy agreement compliance: The tenancy agreement must be PAT-compliant from 1 May 2026 and comply with any council-imposed standard conditions
• Right to Rent checks: Landlords must conduct and retain Right to Rent checks for all adult occupiers
• Maintain the property: The property must be kept in repair throughout the licence term. Councils can inspect licensed properties; inspections are typically proactive, not just complaint-driven

Penalties for selective licensing non-compliance

Non-compliance with selective licensing carries significant financial and legal consequences:

• Renting without a licence: A civil penalty of up to £40,000 per property. Councils can also prosecute criminally for operating without a licence
• Breach of licence conditions: Civil penalties of up to £40,000 per breach, each breach is a separate offence
• Rent Repayment Orders: Tenants in an unlicensed property (where a licence was required) can apply to the First-tier Tribunal for a Rent Repayment Order of up to 24 months' rent
• Section 8 Ground restrictions: Landlords who do not hold a required licence when needed may be unable to rely on certain Section 8 grounds when seeking possession
• Enhanced civil penalty exposure under the RRA 2025: The Renters' Rights Act 2025 increases maximum civil penalties for PRS offences to £40,000. Selective licensing non-compliance interacts with the enhanced penalty regime
• Fit and proper person disqualification: A finding of selective licensing non-compliance; particularly a conviction or civil penalty; can result in a landlord being found not fit and proper, affecting their ability to hold any future HMO or selective licence

Selective licensing and the Renters' Rights Act 2025

The Renters' Rights Act 2025 does not fundamentally change the selective licensing regime under the Housing Act 2004, but it significantly increases the consequences of non-compliance. The new PRS Property Portal, mandatory for all English landlords, will make it easier for councils to cross-check licensed and unlicensed properties. Landlords operating in areas with or without selective licensing must also ensure they:

• Use a PAT-compliant Periodic Assured Tenancy Agreement for all new lettings from 1 May 2026
• Have served the RRA 2025 Information Sheet on all existing tenants
• Register on the national PRS Property Portal
• Use Form 3A for all Section 8 notices