Property licensing is a legal requirement that landlords must comply with in certain areas to ensure rental properties meet safety, management, and housing standards. Local councils use property licensing schemes to regulate private rental properties and protect tenants from poor housing conditions.
Types of Property Licensing
There are three main types of property licensing in England:
Mandatory HMO Licensing – Required for all Houses in Multiple Occupation (HMOs) with five or more unrelated tenants sharing facilities. This applies across England and Wales.
Additional Licensing – Introduced by local councils to cover smaller HMOs (typically properties with three or more unrelated tenants) that do not fall under mandatory licensing.
Selective Licensing – Applies to all privately rented properties (not just HMOs) in designated areas chosen by the local council due to concerns over property conditions, anti-social behaviour, or low housing demand.
Why Does Property Licensing Exist?
Property licensing helps councils:
Improve housing conditions by ensuring properties are safe and well-managed.
Protect tenants from rogue landlords and poor living conditions.
Reduce anti-social behaviour by holding landlords accountable for tenant management.
Tackle overcrowding and enforce minimum space requirements.
Do All Rental Properties Need a Licence?
Not all properties require a licence. Licensing rules vary by property type and local council regulations. Landlords must check whether their property falls under a Mandatory, Additional, or Selective Licensing scheme.
Consequences of Not Having the Correct Licence
Failing to obtain the required licence can result in:
Fines of up to £30,000 per offence
Rent Repayment Orders, requiring landlords to return up to 12 months’ rent
Banning Orders, preventing landlords from renting properties
Restrictions on serving Section 21 eviction notices