Did the Chancellor commit a selective licensing offence? 

Sunday, November 2nd, 2025 - By Richard Tacagni, MD, London Property Licensing

As someone who has specialised in selective licensing since the statutory provisions were enacted almost twenty years ago, it has been interesting to observe the Chancellor’s compliance with licensing rules coming under such intense scrutiny. 

When we look beyond the news headlines, what do we know, what conclusions can we draw, and is this issue now resolved?  

What is selective licensing?

Let’s start at the beginning. Selective licensing can be introduced by local authorities under Part 3 of the Housing Act 2004. These schemes can be introduced to tackle a multitude of issues such as anti-social behaviour, poor property conditions and low housing demand. Once a selective licensing scheme has been introduced in a designated area, it is a legal requirement to apply for a selective licence for every private rented property occupied by a single household or two unrelated sharers.

I’ve published a guide to selective licensing here.

Are there many selective licensing schemes?

My research shows there has been a substantial uplift in selective licensing schemes over the last ten years. In October 2015 there were five selective licensing schemes operating in 15% of London Boroughs. 

By October 2025, there were twenty five selective licensing schemes operating in 60% of London Boroughs.

That’s not to mention the twenty two additional licensing schemes currently operating in London, plus mandatory HMO licensing which applies across England and Wales.

There are currently forty seven additional and selective licensing schemes operating in London, all with different application processes, fees, and conditions. As the schemes are limited to five years, this extensive patchwork of licensing schemes is subject to frequent changes. 

Does Southwark Council operate a selective licensing scheme?

Yes they do. In fact, Southwark Council operate four property licensing schemes which adds to the complexity. The council have borough wide mandatory HMO and additional licensing schemes. They have also introduced two selective licensing schemes. 

Southwark Council introduced a selective licensing scheme covering five council wards on 1 March 2022. The second selective licensing scheme covering a further fourteen council wards came into force on 1 November 2023. It is this second scheme that I understand covers the Chancellor’s property.

A more detailed guide to property licensing schemes in Southwark is available here.

What happened when the Chancellor relocated to Downing Street?

Like many owner occupiers who relocate due to work or family commitments, the Chancellor decided to rent out her family home. From the information publicly available, a local managing agent was appointed and amongst all the essential regulatory checks at the start of any tenancy, they agreed to submit the selective licence application. 

The agent has since explained that a member of staff left the firm at short notice and the promised selective licence application was not submitted. I understand the situation continued until this error was picked up by a journalist. When the error was pointed out, a selective licence application was promptly submitted to regularise the situation. 

Has a selective licensing offence been committed?    

The relevant legislation is found in section 95(1) of the Housing Act 2004. It states: 

“A person commits an offence if he is a person having control of or managing a house which is required to be licensed under this Part (see section 85(1)) but is not so licensed.”

The key add-on provision relevant to this case is found in section 95(4)(a) of the Act. It states:

“…it is a defence that he had a reasonable excuse for having control of or managing the house in the circumstances mentioned in subsection (1).”

Any offence ends on the day a selective licence application is submitted.

Given the intense scrutiny this case has attracted, we know the managing agent has apologised for their error. They promised to submit a selective licence application when the property was first let out but failed to do so. The landlord relied on assurances provided by their agent having entered into a contract for management of the property. 

Based on the known facts, it seems highly likely the Chancellor has the benefit of the reasonable excuse defence. She had a genuine belief her managing agent was applying for the licence. As soon as it transpired they had failed to do so, a licence application was submitted. 

It seems much less likely the managing agent has the benefit of the reasonable excuse defence. They were aware the property needed to be licensed and had agreed to submit a licence application. An administrative oversight due to a member of staff leaving is unlikely to constitute a reasonable excuse. However, we are told the issue was quickly remedied when it came to notice, which shows low culpability. 

Should Southwark Council launch an investigation? 

It seems highly unlikely that Southwark Council will launch a criminal investigation, but let me explain why.

Firstly, the full circumstances of the case are already in the public domain, including a public apology from the agent for their unintended error. This provides a strong basis for a reasonable excuse defence. It is unclear what the purpose of any further investigation would be, and what lines of enquiry remain outstanding.

Secondly, and this is really important, each council must develop and publish their own housing enforcement policy. It needs to be balanced and proportionate in accordance with Regulators’ Code (2014). 

Southwark Council’s Private Sector Housing Enforcement Policy was published in 2021. In relation to licensable but unlicensed properties it states: 

“45. If a landlord cooperates with the Council an informal approach will be adopted so long as a valid application with the appropriate fee is subsequently made within a reasonable time scale.” 

On 30 October 2025 Southwark Council published a clear and concise public statement explaining:

“When we become aware of an unlicensed property, we issue a warning letter advising the landlord that they have 21 days to apply for a license – enforcement action such as fines are reserved for those who do not apply within that time or where a property is found to be in an unsafe condition.” 

It is clear that launching an investigation now would contravene the council’s adopted enforcement policy. As such, from the council’s perspective, this appears to be the end of the matter. They will instead focus on processing and approving the selective licence application.

As a further point of clarification, it has been widely reported that a civil financial penalty for a selective licence offence can be up to £30,000. That is correct, but that is the statutory upper limit and any penalty imposed must be set in accordance with government guidance and local council policy. In Southwark, if a landlord fails to submit a selective licence application following a warning from the council, local policy suggests a much lower penalty in the region of £5,000.  

Personally, I think Southwark Council have got the balance about right and I would urge other councils to adopt a similar approach. Mistakes can happen and not every mistake justifies criminal sanctions. I know of other councils that issue no warning – the first a landlord or agent knows is when a notice of intent to impose a civil financial penalty drops through their letterbox several months later. 

What about a rent repayment order?

The tenants occupying the property could submit a rent repayment order application to the First-tier Tribunal within 12 months. But how likely is that?

I’m sure there will be journalists and no win no fee firms knocking at their door and offering to assist. Whether the private tenant will relish being at the centre of a media circus is less clear.

The path to claiming a rent repayment under the Housing and Planning Act 2016 would not be without its challenges.

Showing the managing agent had committed a selective licensing offence is not enough. The tenant would have to prove beyond reasonable doubt that the landlord committed a selective licensing offence. 

If the landlord can prove a reasonable excuse defence throughout the relevant period, there is no offence and the rent repayment order application would be dismissed. 

As such, it is far from certain that an application for rent repayment order would be successful. Given the delays in the Tribunal system, even if an application was submitted now, it may not be decided until mid-2026.

Even if we assume the tenant could prove a selective licensing offence, would they be awarded 12 months rent? Almost certainly not. There is extensive case law about calculating quantum for rent repayment orders. The circumstances in this case would provide strong mitigation, suggesting a much lower award.   

Where do we go from here?

From the council’s perspective, it seems the matter is concluded. Information in the public domain points to a reasonable excuse defence for the landlord. Launching a criminal investigation would contradict their own enforcement policy so that won’t happen and a civil financial penalty won’t be imposed.

From the tenant’s perspective, they could submit a rent repayment order application, but that will be unsuccessful if it is held the landlord has a reasonable excuse defence throughout the relevant period. 

From a more overarching regulatory perspective, this case highlights the significant financial and reputational risks associated with property licensing for landlords and agents. Almost twenty years since these powers were first introduced, perhaps it is time to replace this complex licensing framework with a simple, consistent and streamlined national licensing scheme that can sit alongside the new landlord database being introduced by the Renters Rights Act 2025. 

The author of this blog, Richard Tacagni is MD at London Property Licensing. He is a Chartered Environmental Health Practitioner and expert housing regulatory advisor to landlords, agents and local authorities. He can be contacted here.

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