Property Licence guide
Selective licensing flips the default. Outside a designated area, a single-household rented home in England does not need a licence to be let. Inside a designation, almost every private rented home does. The shift happens at a boundary line on a council map, and the rules behind it sit in Part 3 of the Housing Act 2004.
The postcode pins the council. For schemes designated council-wide, that is enough. For ward and street designations, picking the address sharpens the answer to a yes or no.
We use the selected street to check loaded street-list schemes.
A postcode cannot tell us how many people live in the property. Answer these four questions and we will say whether the mandatory HMO rule is likely to apply.
Selective licensing is a council-level scheme that requires almost every privately rented home inside a designated area to be licensed. It does not look at the headcount, the household count, or the layout. The trigger is location plus tenancy. If the address falls inside the designation and the property is privately rented under a relevant tenancy, the landlord needs the licence.
The legal basis is in sections 79 to 100 of the Housing Act 2004, sometimes called Part 3. A council passes a designation under section 80, the Secretary of State confirms it where statutory thresholds are crossed, and the licensing regime then runs in the area for up to five years before renewal.
The idea behind the regime is targeted improvement. Councils use it where the local private rented market shows higher rates of antisocial behaviour, poor housing conditions, or a churn that lowers neighbourhood standards. The licence application becomes the moment the council can require evidence of compliance and management capability.
The two regimes are often confused because both end in "licensing". They are not the same thing and they catch different properties.
HMO licensing keys off the household and headcount of the property. A property that meets the section 254 test (three or more tenants from two or more households sharing facilities) is an HMO whether or not the council runs any local scheme. Mandatory HMO licensing applies nationally at the five-occupier threshold.
Selective licensing keys off the address. A single tenant on a one-year tenancy in a one-bedroom flat is caught if the flat is inside a selective area. The same flat outside the designated area needs nothing. The household test does not apply.
A property cannot need both licences at once. Where the property is an HMO under either the mandatory or an additional scheme, that takes priority and selective does not also apply at the same address. For more on how that interacts, see the HMO licence guide.
A selective licensing designation is a council picking an area and saying "every private rented home inside this boundary needs a licence". How that boundary is drawn varies.
The simplest pattern. The designation covers every postcode in the council. The postcode confirms the licence requirement. Used most often where the council has data showing the private rented sector across the whole area shares the same characteristics.
A subset of the council's electoral wards. The designation lists the wards by name. The postcode tells you the council, but the address has to fall inside one of the named wards. Adjacent wards can be in and out of the scheme.
A street-by-street designation. The council publishes a list of streets, often gathered from areas of high private rented density. Two houses on the same postcode can end up with different answers because one street is in the scheme and the next is not.
The designation is drawn as a polygon on a map. The council publishes the map alongside the public notice. Properties on the edge can sit either side, so checking the council map matters more than counting streets.
Some councils combine the patterns. A designation might cover three full wards plus a list of additional streets in two other wards. The notice spells out exactly what is in.
Inside a designation, the rule catches nearly every privately rented property. These are the everyday situations and how they land.
Single household. Inside the scheme area, the landlord needs a selective licence. The fact that the property is a family let does not exempt it.
Same answer. One household, but the licence is triggered by the address sitting inside a selective area. Selective licensing does not care about household count.
Caught. A selective licence is needed if the studio is at an address inside the designation.
If the council runs an additional HMO scheme that covers the property, the additional licence applies and selective does not. If no HMO scheme applies, the property usually falls back into selective licensing because it is privately rented.
Owner-occupier with a lodger is normally exempt under the Schedule 14 carve-out for resident landlords. The selective scheme does not apply.
Selective licensing covers tenancies, not occupancies. A property let exclusively as a holiday or short let usually falls outside the scheme because there is no qualifying tenancy. The council can still ask for evidence of how the property is being used.
Every scheme has its own list of carve-outs, but a common spine runs through almost all of them. Schedule 14 of the Housing Act 2004 sets the national exemptions baseline. The council's designation notice adds any local extras.
Typical exemptions include properties owned and managed by a registered provider of social housing, properties subject to interim or final management orders, accommodation provided under section 188 or 200 of the Housing Act 1996 (homelessness duty placements), properties licensed under another statutory regime (mostly HMOs), buildings owned by a local authority, hospital and care home accommodation, prison and probation hostel accommodation, and student halls of residence managed by an approved education provider.
The carve-outs that catch landlords by surprise are the ones around tenancy length. Selective licensing follows the definition of "house" and "occupied under a tenancy or licence" in section 79. A genuine tenancy at will, a tenancy for a fixed term of more than 21 years, or a tenancy granted by a freehold owner-occupier to a family member can all fall outside the rule depending on the wording of the council's notice.
Applications go through the council that runs the scheme. Most councils now run the process through an online form. The form asks for the property address, the landlord and any agent's correspondence details, proof of right to manage, a current gas safety certificate, an Electrical Installation Condition Report no more than five years old, an Energy Performance Certificate, and the fee.
The licence is held by a named person with management responsibility for the property. For a freehold house the holder is usually the freeholder. For a long-leased flat the holder is usually the leaseholder. A managing agent can hold the licence with the owner's written authority, in which case the agent's address goes on the licence.
The council then runs a fit and proper person assessment under section 89. Recent housing offences, fraud convictions, immigration breaches, or a poor compliance record with previous licences can block the application. The same test applies to anyone with day-to-day management of the property.
The council can ask for additional information during the application: a floor plan, copies of tenancy agreements, an asbestos survey for older properties, or proof of deposit protection. Where the application is incomplete the council typically asks once and then refuses, so submitting a full pack on the first attempt saves weeks.
Each council sets its own fee. A typical selective licence sits between £500 and £950 for the standard five-year term, with London councils usually charging at the top of that range and northern unitary authorities often lower. The fee covers the council's costs of running the scheme, not a profit. Surpluses have to be reinvested into local housing enforcement.
The fee is almost always split into two parts. Part A is paid on application and pays for the processing work. Part B is paid when the licence is granted and is often partly refundable if the application is withdrawn. Councils cannot charge a single combined fee under Hemming v Westminster City Council (the case that established the two-part structure).
Discounts are common. Energy Performance Certificate ratings of B or above usually attract a discount, often around £100 off Part B. Landlords accredited by a recognised local or national scheme can also qualify. Where a single landlord applies for several properties in the same scheme together, councils sometimes offer a portfolio discount on Part A. Discounts have to be claimed on the application and supported with evidence.
Selective licensing designations are time-limited. A designation lasts a maximum of five years and can be ended early by the council under section 84. When the term ends, every licence in the scheme ends with it.
If the council renews the designation, every existing licence has to be re-applied for under the new scheme. The renewal application is treated as a fresh application, not a continuation. Fees and conditions can change between cycles. Some councils raise fees significantly at renewal because the previous cycle uncovered higher enforcement costs than budgeted.
If the council does not renew, the property reverts to the default of needing no licence (unless an HMO licence applies separately). The council can still pursue enforcement for offences committed during the old scheme for up to twelve months after the designation ends.
Letting an unlicensed property inside a designated area is a criminal offence under section 95 of the Housing Act 2004. The council can prosecute through the magistrates' court, or skip court entirely and impose a civil penalty of up to £40,000 under section 249A. The civil penalty route does not need a guilty plea or a hearing, which is why it has become the more common enforcement tool since 2017.
Tenants of an unlicensed property can apply to the First-tier Tribunal for a rent repayment order. The order can recover up to twelve months of rent already paid back to the tenant. Universal Credit and housing benefit paid for the same period can be reclaimed by the council. The combined exposure can run into the tens of thousands across multiple tenants.
Two relevant housing offences within twelve months can trigger a banning order from the First-tier Tribunal. A banning order bars the landlord from letting property for a minimum of twelve months. The council then enters the landlord on the national rogue landlord database under section 30 of the Housing and Planning Act 2016.
The tenancy-side bite is the section 21 block. A landlord cannot serve a valid section 21 no-fault eviction notice on a tenant in an unlicensed property where the property should be licensed. The tenancy itself remains valid. The route to end the tenancy by no-fault notice is closed until the licence is in place.
A buy-to-let mortgage usually requires the borrower to hold every licence the local authority demands. Lenders take the licence reference at drawdown and often again at any product transfer. Where the property is in a selective area and unlicensed, the loan is technically in breach. Most lenders treat the breach as a flag rather than an immediate default, but a small number have called in loans on that basis.
Landlord insurance is also written on the assumption that the property is properly licensed where one is required. Insurers can void a related claim where the council's civil penalty or RRO exposed an unlicensed period. The licence reference normally goes on the policy schedule at renewal.
For property purchases, buyers should ask the seller for the current licence reference, the conditions attached, and any open enforcement notices. The licence does not transfer on sale. A new owner has to apply for a fresh licence in their own name before the property can be re-let.
A property can only need one licence type at a time. Where both schemes are technically in scope, the HMO licence wins. The reasoning is statutory: section 79 of the Housing Act 2004 carves HMO-licensed properties out of selective licensing, because the HMO regime already imposes the same management duties.
The practical edge case is the small HMO at exactly three occupiers from two households, in a council that runs both a selective scheme and no additional HMO scheme. That property meets the section 254 HMO test but does not need a mandatory or additional HMO licence. Because section 79 only carves out HMOs that hold a licence, this property falls inside selective licensing and needs a selective licence.
The same property in a council that runs both a selective scheme and an additional HMO scheme: the additional HMO scheme catches it, the HMO carve-out kicks in, and the selective licence does not apply. So whether the small HMO needs the HMO licence or the selective licence depends on which schemes the council operates.
Selective designations are local. The street list, the ward map, the fee, the application URL and the contact details all sit with the council where the property is. Use the postcode checker above, or pick the council from the directory.