Selective licensing: what landlords need to know (2026)
22 August 2026 · AgentCheck Editorial · 7 min read
Part of our UK Landlord Legal Guide
Selective licensing means your council has designated an area where every privately rented home needs a licence, whatever its size and however many people live in it. It sits in Part 3 of the Housing Act 2004, it is set locally, and it can apply to one ward and not the next. Since 1 May 2026 the maximum civil penalty for letting an unlicensed property is £40,000, and the First-tier Tribunal can order up to 24 months of rent to be repaid. There is no national list, so checking your own council is the only reliable method.
Plenty of landlords find out about selective licensing the hard way. A letter arrives from the council, or a tenant mentions it in passing, and by then the property has been let for a year. The rules are not secret. They are local, which means no national register will warn you and nothing lands on your doormat automatically.
This guide covers what selective licensing is, how it differs from HMO licensing, how to check whether your property is caught, and what happens if you get it wrong.
What selective licensing actually is
Under Part 3 of the Housing Act 2004, a local housing authority can designate the whole of its area, or any part of it, as subject to selective licensing. Where a designation is in force, privately rented housing in that area has to be licensed by the council.
The point that trips people up is that this has nothing to do with the number of occupants. A two-bedroom terrace let to one family needs a licence on exactly the same terms as a much larger property. If the address sits inside the designated area and it is privately rented, you need a licence.
There are exemptions, set out in the Selective Licensing of Houses (Specified Exemptions) (England) Order 2006. Homes let by registered providers of social housing sit outside the regime, and an HMO that already requires a licence under Part 2 of the Act is not licensed twice.
All of this applies in England. Wales runs landlord and agent licensing through Rent Smart Wales, and Scotland and Northern Ireland have their own registration systems, so none of the detail below transfers.
Selective, additional and mandatory licensing are three different things
- Mandatory HMO licensing applies across England without any council designation. An HMO occupied by five or more people forming two or more households, who share a kitchen, bathroom or toilet, needs a licence.
- Additional licensing is a council decision to extend HMO licensing to smaller shares in a designated area, commonly three and four person households.
- Selective licensing is a council decision to license ordinary private rented homes in a designated area, whatever the household make-up.
A property falls into one of these, not several at once. If it needs a mandatory or additional HMO licence, that is the licence it needs. Our guide to HMO licensing in 2026 covers the first two in detail.
Why a council brings a scheme in
A designation has to be justified against at least one of six statutory conditions. The area must be experiencing, or be likely to experience:
- low housing demand
- a significant and persistent problem caused by anti-social behaviour
- poor housing conditions
- high levels of migration
- a high level of deprivation
- high levels of crime
For poor housing conditions, migration, deprivation and crime, the area also has to contain a high proportion of private rented housing. Government guidance expects a consultation of at least ten weeks before a designation is made, and the council has to show that licensing will achieve something other measures would not.
One change matters more than the rest. Since 23 December 2024 councils in England no longer need the Secretary of State to confirm a selective licensing scheme, whatever its size. Larger schemes previously needed central government sign-off. That step has gone, which is why wider designations have been appearing.
How to check whether your property needs a licence
Start with the council website and search for selective licensing alongside your postcode. Most councils publish a designation map or a street-by-street list. If the boundary is at all unclear, email the licensing team with the full address and keep the reply.
Worth establishing while you are there:
- whether the postcode sits inside a current designation, and whether a new scheme is out to consultation
- the scheme start and end dates, since a designation can run for up to five years
- the fee, how it splits between application and grant, and whether accredited landlords get a reduction
- the licence conditions attached to that particular scheme
- the documents you need to submit and the realistic processing time
Fees are set locally and vary widely, so the only figure worth planning around is the one on your own council's page. A designation cannot come into force until at least three months after it is made, and section 83 of the Act requires the council to publish notice of it. So there is warning, but only for landlords who are looking for it.
If an agent manages the property, ask them the question directly and get the answer in writing. Responsibility for holding the licence does not move to the agent just because they collect the rent.
What a licence involves
You apply per property, pay a fee set by the council, and name a licence holder and a manager. The council assesses whether those people are fit and proper, which takes in relevant convictions, previous housing enforcement and any history of unlawful discrimination.
Conditions vary between schemes but usually cover annual gas safety checks, electrical safety, working smoke and carbon monoxide alarms, deposit protection, waste arrangements, tenant referencing and a duty to act on anti-social behaviour. Much of it overlaps with obligations you already have, including your repair responsibilities. What the licence adds is a route for the council to enforce them directly.
The cost of getting it wrong
Being in control of or managing an unlicensed property where a licence is required is a criminal offence. The council can prosecute, which carries an unlimited fine on conviction, or issue a civil penalty as an alternative. From 1 May 2026 the maximum civil penalty rose from £30,000 to £40,000.
Separately, a tenant or the council can apply to the First-tier Tribunal for a rent repayment order. From 1 May 2026 the maximum period covered doubled from twelve months of rent to twenty-four, and the window for applying doubled with it. That is the number that turns an administrative slip into a serious loss, and a civil penalty and a rent repayment order can both follow from the same unlicensed letting.
Not knowing about the scheme is not a defence. Councils are required to publish designations properly, and that is treated as sufficient.
Buying into a licensing area
A licence does not transfer with the property. If you buy a tenanted house inside a designated area, the seller's licence ends and you need your own. Raise it during conveyancing, ask whether a scheme is in force or in consultation, and put the fee in your figures. The same applies if you inherit a let property or move one into a company name.
How this sits alongside the Renters’ Rights Act
Licensing and the tenancy reforms that took effect on 1 May 2026 are separate systems, and one does not excuse the other.
The Act provides for a Private Rented Sector Database that landlords will eventually have to register with, but it is not live. Government has signalled a later phase, rolled out area by area, without publishing dates. When it does arrive, registering on it will not be a substitute for a council licence, and a property in a designated area will need both. Our guide to the Renters’ Rights Act sets out what has actually commenced and what has not, and if you are letting for the first time the first-time landlord checklist is a sensible starting point.
One overlap does bite now. Since 1 May 2026 a landlord cannot obtain a possession order on a section 8 ground unless the tenancy deposit is protected and the prescribed information has been served. Licence conditions usually require the same thing, so the two regimes are pulling in the same direction.
A short checklist
- Check the postcode against your council's current designations now, not when the tenancy ends.
- Check for schemes out to consultation, and respond if you have a view.
- Diarise the scheme end date and your licence expiry separately. They are not the same date.
- Keep the licence, its conditions and your compliance certificates together in one place.
- If you own property in more than one council area, check each one. Neighbouring authorities rarely match.
If you would rather someone else tracked designations, renewal dates and licence conditions, that is standard work for a managing agent. You can compare local letting agents, their fees and what their management service actually includes on AgentCheck.
This article is general information about the law in England, not legal advice. Licensing schemes are designated locally and change often, so always confirm the position with the council for the property's own address.
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