What is selective licensing and does it apply to your properties?

Selective licensing is one of the most misunderstood parts of the private rented sector. Many landlords only find out about it when a council enforcement officer knocks on the door — and by that point, a fine of up to £40,000 is already on the table. Here is what selective licensing actually is, how to check if it affects your properties, and what you need to do about it.

What selective licensing is

Under Part 3 of the Housing Act 2004, local authorities in England can require landlords to obtain a licence for every privately rented property in a designated area. This is separate from mandatory HMO licensing — selective licensing applies to single-family lets and smaller shared properties that would not normally need a licence.

The idea behind it is simple. Councils that identify areas with low housing demand, significant antisocial behaviour, poor property conditions, or high deprivation can use selective licensing to raise standards. The licence comes with conditions: properties must meet minimum safety requirements, landlords must provide references, and tenancy management must meet defined standards.

How councils designate areas

Since 23 December 2024, a council no longer needs Secretary of State approval to introduce a selective licensing scheme of any size. Before then, schemes covering more than 20% of its geographical area or 20% of its privately rented stock needed government sign-off. Designations typically last five years, after which the council must renew or let the scheme lapse.

Before introducing a scheme, councils must run a public consultation lasting at least 10 weeks. They publish an evidence base explaining why the area meets the statutory criteria. In practice, most schemes are concentrated in urban areas with older housing stock — but that is not always the case. Some rural district councils have introduced schemes too.

How many councils currently have schemes

As of early 2026, over 60 local authorities in England operate at least one selective licensing scheme. Some — like Liverpool, Newham, and Nottingham — cover large parts of their borough. Others run targeted schemes in a handful of wards. The number has been growing steadily since 2015, and several more councils have consultations underway right now.

There is no single, official national register of all schemes. The government has discussed creating one, but as of today, you need to check each council individually. This is a particular headache if you manage properties across multiple local authority areas.

How to check if your properties are in a scheme

Start with the council website for each local authority where you own or manage properties. Search for "selective licensing" or "property licensing." Most councils publish interactive maps showing exactly which streets are covered. If there is no map, contact the private sector housing team directly — they are required to tell you.

For portfolios spread across several boroughs, this quickly becomes time-consuming. You need to check each property individually, track which schemes are active, and monitor for new designations. Some councils give only a few months' notice before a new scheme goes live, so checking once a year is not enough.

What the licence requires

Licence conditions vary between councils, but common requirements include: a valid gas safety certificate, working smoke and carbon monoxide alarms, an up-to-date electrical installation condition report (EICR), proof of deposit protection, and a satisfactory tenancy agreement. Some councils also require references for the landlord and any managing agent.

You will also need to demonstrate that you are a "fit and proper person" to hold a licence. This means no unspent criminal convictions for housing offences, fraud, or violence, and no history of breaching housing legislation.

Penalties for not licensing

Operating a rental property without a licence in a designated area is a criminal offence. Councils can issue civil penalty notices of up to £40,000 per property, or prosecute in the magistrates' court. Some councils routinely issue fines at the higher end of the scale for repeat offenders.

There is also a financial risk beyond fines. If a property was unlicensed during a tenancy, the tenant can apply for a Rent Repayment Order (RRO) through the First-tier Tribunal. The tribunal can order the landlord to repay up to 24 months' rent for offences from 1 May 2026 (12 months for earlier offences). In practice, awards vary, but RROs in the range of £5,000 to £15,000 are common.

Until 1 May 2026, you also could not serve a valid Section 21 notice while a property was unlicensed. That restriction went with Section 21 itself, so any possession claim now proceeds on Section 8 grounds.

How to stay on top of it

The challenge with selective licensing is that it is a moving target. New schemes are introduced, existing ones expire or are renewed with different boundaries, and licence conditions change. For landlords and agents managing more than a handful of properties, manual tracking is unreliable.

The practical approach is to maintain a central register of every property in your portfolio, mapped to its local authority and any active licensing scheme. Set renewal reminders well ahead of expiry — most licences last five years, but processing times can stretch to several months. Keep digital copies of every application, confirmation, and condition report so you can evidence compliance on demand.

Tekniti tracks selective licensing status for every property in your portfolio, alerts you when new schemes are introduced in your areas, and monitors licence expiry dates automatically. When a council officer asks for proof, you pull it up in seconds rather than digging through filing cabinets.