How selective licensing works (Housing Act 2004, Part 3)
Selective licensing is not about HMOs. A council designates an area — sometimes a few streets, sometimes the whole borough — and from the start date every privately rented home in it needs a licence, including an ordinary house or flat let to a single family. That is the part landlords miss: you can be perfectly outside every HMO rule and still be committing an offence.
- A designation lasts a maximum of 5 years, then lapses unless the council consults and designates again.
- Councils must consult for at least 10 weeks before designating, which is why schemes are usually visible months ahead of their start date.
- A scheme covering more than 20% of the area or more than 20% of its privately rented homes needs the Secretary of State's confirmation. Below that threshold the council can designate on its own authority under the general approval — which is why borough-wide schemes take longer to appear.
- Grounds for designating include low housing demand, significant anti-social behaviour, poor property conditions, high migration, high deprivation or high crime.
What happens if you don't license
Letting a licensable property without a licence is an offence under section 95(1) of the Housing Act 2004. Councils can prosecute, or impose a civil penalty instead. Since 1 May 2026 the maximum civil penalty is £40,000 (raised from £30,000 by the Renters' Rights Act 2025), with government guidance suggesting a starting point around £12,000 for an unlicensed selectively licensed property before aggravating factors. A Rent Repayment Order can additionally require you to repay up to 2 years' rent.
Note that licensing is enforced independently of the tenancy regime. Since Section 21 was abolished on 1 May 2026 there is no longer a “you can't serve a section 21” consequence — but the financial penalties above are larger than they were, not smaller. Serving a Section 21 notice now is a separate breach in its own right, with a council fine of up to £7,000; Gateshead issued the first reported one, £3,600, in 2026. See Section 21 abolished: fines and what to do now.
Common exemptions include properties already licensed as HMOs under Part 2, lettings by registered providers of social housing, and certain tenancies granted to family members. Always check the council's own scheme conditions.