Keeping up with property licensing can feel like a bit of a minefield, but it’s more important than ever for landlords to stay on top of the rules.
In 2025, councils in England and Wales will have more power to introduce Selective licensing schemes, meaning many more rental properties could need a licence.
If you don’t have the right one, you could face hefty fines, legal issues, or even restrictions on renting out your property.
The good news? Understanding the requirements now can save you a lot of hassle later. In this guide, we’ll walk you through when a licence is needed, what’s changing, and how to stay on the right side of the law.
- When do you need a property licence?
- Upcoming licensing changes in 2025
- The risks of renting without the correct licence
When do you need a property licence?
Many landlords assume that licences are only needed for large shared properties, but that’s not always true.
Local councils decide which properties require a licence, and if your property is in an area with Selective Licensing, you’ll need one regardless of its size or the number of tenants.
In total, there are three main types of property licensing, and whether you need one depends on your location and how you rent out your property.
Selective licensing
Some councils, especially in cities like London, have introduced Selective licensing, which applies to all rental properties in designated areas – not just HMOs (houses in multiple occupation).
These schemes are usually brought in where councils have concerns about poor housing conditions or anti-social behaviour.
If your local authority has introduced Selective licensing, you’ll need to apply for a licence, even if you’re renting to just one household.
Additional licensing
If you rent to three or more tenants from two or more different households* who share common areas like a kitchen or bathroom, your property will need a licence if your local authority has established an Additional licensing scheme.
This scheme is used to regulate smaller shared properties that don’t meet the threshold for full HMO status but are still deemed to require oversight.
*One household is made up of family members, a couple, two unrelated people sharing the same home or a single person. Unrelated adults who are not a couple or part of a family are separate households.
Mandatory HMO licensing
If you rent to five or more tenants from two or more different households, your property is classified as an HMO and always requires a Mandatory HMO licence.
These licences ensure the property meets important safety and management standards, protecting both landlords and tenants.
Since licensing rules vary by council, it’s always best to check your local authority’s website to see which regulations apply to your property.
A quick check now could save you thousands of pounds down the road!
Upcoming licensing changes in 2025
In 2025, property licensing is going to get more complicated, with local councils gaining more power to introduce Selective licensing schemes without needing central government approval.
This means more areas could soon require landlords to have a licence for their rental properties – something that might affect you sooner than you think.
Several councils have already announced new schemes:
- Blackpool Council will require landlords to get a licence for every rental property they own in certain areas, starting on 1st April 2025. This will cover more than 20% of the borough.
- Barking and Dagenham are the first to take full advantage of these new powers. They’ll be launching a borough-wide Selective licensing scheme, meaning from 6th April 2025, all privately rented properties in the area will need to be licensed.
- Lambeth is another borough set to make significant changes. A new Selective licensing scheme will affect most of the borough, excluding areas like Waterloo, South Bank, and Vauxhall. With nearly 50,000 privately rented homes in Lambeth, this scheme is expected to have a big impact, and landlords will need to ensure their properties comply. This scheme is expected to be in place by July 2025.
These are just a few examples of upcoming licensing changes, and it’s likely that more councils will follow suit.
As regulations continue to evolve, it’s important to regularly check your local authority’s website for updates and make sure you’re staying on top of these changes.
The risks of renting without the correct licence
Renting out a property without the correct licence might seem like a small oversight, but the risks are far from insignificant.
If you get caught without the proper licence, the consequences can be serious and costly. Let’s break down some of the potential risks you could face:
Financial penalties
One of the most immediate risks is the possibility of hefty fines. If your property is found to be operating without the right licence, you could face rent repayment orders, which could require you to pay back up to 12 months’ rent.
This could be a huge blow, especially if you’ve been renting the property out for a while without realising you need a licence.
Legal consequences
Failing to obtain the proper licence can also lead to management orders being imposed on your property.
A management order gives the local council control over your property, meaning they can take over the responsibility for managing it, including collecting rent and carrying out repairs.
In some cases, landlords who repeatedly fail to comply with licensing rules could face being banned from renting out their properties altogether.
Restrictions on evictions
Without a valid licence, you may also face restrictions when it comes to managing your tenancy.
One of the most significant consequences is losing the ability to issue Section 21 eviction notices (while they’re still here), which allow you to regain possession of your property without having to give a reason.
If you need to serve your tenants with a Section 21 eviction notice, you can use our free notice serving tool to do so correctly and legally.
Other consequences
In addition to the financial, legal, and eviction risks, failing to comply with licensing requirements can also lead to long-term damage to your reputation as a landlord.
Word can spread, and tenants may become wary of renting from a landlord who doesn’t follow the rules. A poor reputation could make it much harder to attract reliable tenants in the future.
What’s more, non-compliance could make it difficult for you to apply for or renew licences in the future. Some councils may view your failure to comply as a sign of poor management, which could prevent you from securing a licence for new properties down the line.
In short, not having the correct licence can lead to financial losses, legal complications, and long-term damage to your reputation. That’s why it’s vital to stay on top of the regulations in your area and make sure your properties are fully compliant before it’s too late.
Applying for a property licence
The process of applying for a property licence is generally straightforward, but it can vary depending on your local council’s specific requirements.
While it’s not usually overly complicated, you should be well-prepared to avoid delays or unnecessary issues. Here’s an overview of what you can expect:
Application form
Most councils have an online application system where you can fill out a form. You’ll need to provide key details about the property, such as its size, the number of tenants, and the types of facilities available (e.g., bathrooms and kitchens).
It’s a good idea to have all the information at hand when you start, as this will make the process quicker.
Required documents
Along with your application form, you’ll need to submit a variety of documents. These typically include:
- Proof of safety checks: Councils will want to confirm the property meets minimum safety standards. This includes documents like the Energy Performance Certificate (EPC), gas safety certificate, and electrical safety certificate.
- Proof of property management: Some councils will require evidence of how you manage your property, including details of tenancy agreements and how you handle tenant complaints or repairs.
Property inspection
Depending on your council, you may also be required to arrange for a property inspection before your licence is issued. While not all councils do this, many will want to check that your property meets their standards for health and safety, as well as general living conditions.
If an inspection is required, it’s a good idea to arrange it early so you’re not waiting on a last-minute visit.
Cost and processing time
Once you’ve submitted your application and documents, the council will typically process your application. This can take several weeks, depending on their workload and the complexity of your case. To avoid any delays, make sure your application is complete and that you’ve provided all the necessary documents upfront.
Moreover, the cost of obtaining a property licence can vary depending on the council and the type of property you’re renting out.
Some councils charge a flat fee, while others may have a tiered pricing structure based on the size of the property or the number of tenants. It’s a good idea to check the fees in your area so you’re not caught off guard.
If you’re feeling unsure about any part of the process, our new Licensing Assistance page can help guide you through everything you need to know.
We’ve gathered all the key information and helpful resources in one place, making it easier for you to stay compliant and avoid unnecessary stress.