What is selective licensing? Your guide to council regulations

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Selective licensing schemes were put in place under an extension of the Housing Act 2004. They are implemented within a designated area at the council’s discretion and apply to all privately rented homes.

The government chose to introduce selective licensing for the private rented sector in a bid to improve quality standards and reduce anti-social behaviour with a highly targeted approach for landlords and letting agents.

Local authorities may require landlords and letting agents to apply for a selective licence at their discretion. When a selective licensing scheme is put into place in a given area, it applies to all private rented properties, regardless if they fit into the definition of a house in multiple occupation. 

Selective licensing will be implemented by councils to specifically tackle problems in their areas that tenants face. This means that the areas of the city or region that selective licensing aims to target will often be specific streets or wards, making them particularly difficult to understand for landlords who rent out properties. 

Properties in the designated areas will need to obtain a licence by going through the council’s application process.

The criteria for selective licensing of privately rented properties relate to the issues that relate to the specific areas. Councils have the powers to introduce selective licensing in any region after a consultation, but must get permission from the government if the area covered makes up more than 20% of the entire region. 

The criteria in which selective licensing is implemented may include: 

• Areas with low housing demand or those at risk of becoming low-demand​​.
  
• Presence of persistent anti-social behaviour such as noise, vandalism, or criminal activities​​.
  
• Widespread poor property conditions affecting the health and safety of residents​​.
  
• High levels of migration impacting local socioeconomic conditions​​.
  

Significant deprivation in terms of employment, income, health, and crime rates​​.

Any private properties in a designated area will require a selective licence unless they already require a licence under a mandatory HMO or additional scheme. Landlords or letting agents must first fill out the application form on the council’s website, where you can also find out about the associated licence fee and what you need to apply. 

The application process may differ depending on the licensing conditions per council, but you will generally need to supply an EPC certificate, Electrical Installation Condition Report, and a gas safety certificate if applicable. 

After you apply for a licence, you’ll need to make sure that your property is in line with with the licence conditions outlined by the council. Conditions for a new scheme may differ depending on the selective licensing designation, but they tend to include complying with various conditions to ensure the safety and proper management of their properties.

Landlords must provide tenants with a written tenancy agreement, obtain references before renting, and protect deposits in a statutory tenancy deposit scheme. Landlords must also supply tenants with essential documents like the ‘How to Rent Guide,’ gas safety certificates, and contact information.

Once you have completed your licence application you can expect your rented accommodation to be inspected as part of the application process to determine whether the property is suitable to hold a selective licence.

Once the licence is granted, it will be valid for five years. It’s important to note that selective licences cannot be transferred. If the landlord changes for a property, the new landlord will no longer be a licence holder and will have to apply for a new licence.

Once a designation is made for the selective licensing of houses in a city council, it’s paramount that all private rented homes in the area subject to selective licensing receive one unless you have an exemption.

Rogue landlords who do not apply for a licence are subject to fines of up to £30,000 per unlicensed property and rent repayment orders of up to 12 months. The Mayor of London also runs a national rogue landlord database which your details could be uploaded on, bringing bad publicity to your agency. 

If you’re concerned about unlicensed properties in your property portfolio, use our free property licence checker today. We can tell you all the licensing requirements for your property, including if it meets selective licensing conditions.

Selective licensing fees have been under scrutiny by private landlords due to their high values. Fees from existing licensing schemes are intended to be used for enforcement and inspections of rented properties in the borough or councils. 

These fees are also ring fenced, meaning that councils make no financial gain from the licence fees as all the money feeds directly back into enforcement and improving the property standards of the area.

Keeping up to speed on selective licensing is important for all landlords and letting agents to ensure compliance and the safety of tenants. 

If your privately rented property is in an area with a selective licensing designation, it will need to be licensed regardless of the number of occupants or households formed. 

At Kamma, we automated licensing for 100+ letting agents to remove the risk of non-compliance and cut out tedious manual processes. Please book a demo to find out how we can help you.

Find out what licensing your property needs today.