What Are Selective Licensing Schemes? & What Landlords Need To Know

In a selective licensing area, most privately rented homes need a licence from the local council, though some are exempt. Councils bring in these schemes to tackle problems such as poor property conditions or anti-social behaviour.

Article updated: October 2026

What Are Selective Licensing Schemes?

A selective licensing scheme is a rule a council sets for an area it chooses. Inside that area, most privately rented homes need a licence from the council, houses and flats alike, however many tenants live there. Some are exempt.

Outside a selective licensing area, a landlord in England does not usually need a licence to let a property. The exceptions are larger houses in multiple occupation (HMOs), and smaller HMOs inside a council's additional licensing area that are of the type the scheme covers. Under section 85 of the Housing Act 2004, an HMO that needs an HMO licence does not need a selective licence as well.
The reasons for introducing selective licensing

In general, selective licensing schemes are introduced by local authorities in order to tackle problems they have identified in the private rented sector or PRS in their area.

The reasons why selective licensing schemes are introduced can include that the area is one which is experiencing low housing demand, perhaps because people are reluctant to move there, or that it is likely to become such an area. It can be because the area has a significant and persistent problem with anti-social behaviour (ASB). Councils can propose selective licensing schemes if the area has high levels of deprivation, high levels of crime or high levels of migration.

Local councils can also propose introducing a selective licensing scheme if they believe the area has what is known as poor property conditions. Poor property conditions are the main reason local councils put forward as to why a selective licensing scheme is needed in an area.

How Selective Licensing Schemes are Introduced

Local councils introduce selective licensing schemes in their area, using the legal power in Section 80 of the Housing Act 2004. The Renters' Rights Act also creates national landlord registration for England's private rented sector; that does not replace a council licence where one is required.

Before introducing selective licensing councils must consult with local residents including landlords. They must be able to show that a selective licensing scheme is justified under the relevant legislation and that it is part of a plan that will lead to an improvement in the housing conditions in that area.

Councils in England no longer need individual permission from the Secretary of State to introduce a selective licensing scheme. The government's selective licensing guidance for local authorities records that a General Approval came into force on 23 December 2024 which removed the confirmation requirement for schemes of any size. The consultation and the other statutory conditions still apply.

Once introduced, selective licensing schemes last for up to five years and landlords only have a limited grace period in which to apply for one. After five years they may be renewed for a further period or they may lapse. If a selective licensing scheme lapses a licence is no longer needed to let property in that area.

Does My Rental Property Need a Licence?

A rental property needs a selective licence if it is in a selective licensing area and is not exempt. The local council can tell you whether your street is inside a scheme.

You can find out which local authority covers an area using the government's council finder.

Selective licensing schemes can potentially cover all of a council area but, usually, they only cover part of a town or city.

The local council will have a map or list of streets which are subject to selective licensing. These maps often reference official street identifiers like unique street reference numbers to ensure precise area boundaries.

A selective licence is not needed where a landlord lives in the property and has lodgers.

Which Towns and Cities have Selective Licensing?

Selective licensing schemes are relatively rare. Only about 20% of council areas in England have one.

Places which have selective licensing at the time of writing include (but are not limited to) parts of Birmingham, Blackpool, Bristol, Doncaster, Leeds, Leicester, Liverpool, Luton, Manchester, Middlesbrough, Newcastle upon Tyne, Nottingham, Oxford, Rotherham, Sefton, Slough and Wirral.

Which London Boroughs have Selective Licensing?

London boroughs which have selective licensing at the time of writing include (but are not limited to) Barking & Dagenham, Bexley, Brent, Ealing, Hackney, Hammersmith & Fulham, Harrow, Islington, Newham, Redbridge, Southwark, Tower Hamlets and Waltham Forest.

As new selective licensing schemes are being proposed (and can lapse) all the time it is very important to check the latest situation before buying to let in an area.

The Mayor of London's website has a London property licence checker where you can check what licensing schemes operate in any of the London boroughs.

Does my HMO need a Licence?

Large HMOs (HMOs occupied by five or more people who form more than one household) do not need a selective licence. Instead, they need an HMO licence.

Smaller HMOs do not usually need a licence. The exception is where the council runs an additional licensing scheme and the HMO is inside the area and of the type that scheme covers. In a selective licensing area, a small HMO usually needs a selective licence. It does not need one if it already needs an HMO licence under an additional licensing scheme, or if another exemption applies.

Properties Which do not Need a Selective Licence

Some rented properties are exempt from selective licensing even if they are in a selective licensing area. These include properties owned by local housing authorities and certain public bodies, business tenancies, agricultural holdings and holiday lets. Properties that are let out to family members are also exempt.

The Costs Involved

Licensing fees are set by the relevant local authority. There may be a two-part fee made up of an application fee plus a fee for issuing the selective licence.

A selective licence will cost from around £600 to £800 per property on average, but it varies according to the area. There are usually discounts where a licence holder owns several properties or if they are members of a local landlord accreditation scheme.

How and Where to Apply

You apply for a selective licence to the local authority for the area, usually either online or using a paper form. The licence is required by the person who controls and manages the property. This will usually be the landlord but it may be the managing agent. A company may also be the selective licence holder in many cases.

Selective licences are not transferable. A landlord buying a property in a selective licensing area will need their own licence even if the current landlord already has one.

To obtain a selective licence an applicant will need to be what is called a fit and proper person. This includes having no serious criminal convictions, including convictions relating to renting property.

To obtain a selective licence a property will need to comply with certain standards. These include having the necessary gas and electrical safety certificates, and smoke and carbon monoxide alarms that all rental property requires.

Applicants for selective licences must also have a house management plan. They must have arrangements for dealing with matters such as repairs and maintenance, rubbish disposal, tenancy management and issues connected with anti-social behaviour.

Properties subject to selective licensing must meet certain room size and amenity standards.

The relevant local council can provide details of selective licensing standards in their area.

Fines and Penalties for Non-Compliance

Under the government's civil penalties guidance, the maximum civil penalty for letting a property without a required licence is £40,000 for an offence committed on or after 1 May 2026. For offences before then, the old £30,000 limit and the council's penalty policy in force at the time still apply. The council can use a civil penalty instead of prosecuting. If it prosecutes, the court can set an unlimited fine. Penalties can also follow for not keeping the property to the required standards. A rent repayment order may be made and landlords can be subject to a banning order.

Where a selective licensing scheme is in operation the local authority may inspect a rental property either before a licence is issued or subsequently. They may also make checks to identify properties which require a selective licence but which do not have one.

How Does Selective Licensing Affect a Rental Property Purchase?

Buying to let in a selective licensing area is likely to be more complex, take more time and be more expensive than operating in an area where a licence is not required. Licensing is one of the many rules landlords now have to follow, and the cost of those rules is a real part of the answer to is buy-to-let still worth it.

By definition, selective licensing is usually introduced to tackle problem housing areas. So landlords in these areas may find they have more problems to deal with, including problems with crime and anti-social behaviour and problem tenants in their property or neighbouring properties.

However, there can be some possible advantages. Selective licensing areas are very often found in areas with very cheap property. So, good letting yields can often be found in these areas. It is also suggested by most local authorities that the operation of a selective licensing scheme helps to improve the housing stock and the property market in that area. So landlords in these areas may benefit in the longer term.

Before comparing investment property opportunities in a licensed area, include the fee, required works and management obligations in the appraisal. This makes it easier to compare conventional buy-to-let properties with advertised below market value deals on the same basis.

Landlord Licensing in Northern Ireland, Scotland and Wales

Selective licensing only currently applies in England.

Northern Ireland, Scotland and Wales have different property or landlord licensing systems, known by different names and with each with their own different requirements.

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