Selective Licensing

Understanding selective licensing

Understanding selective licensing is not an easy task – we know that and we’ve been using the legislation since it came into force in April 2006!

To make your life a bit easier, we have produced this free guide to help you understand selective licensing schemes which apply to private rented properties in various parts of England.

There is a common misunderstanding that property licensing is restricted to Houses in Multiple Occupation (HMOs). This is not always the case.

Much depends on where your property is located. Whilst mandatory HMO licensing and additional licensing are restricted to certain HMOs, local authorities can implement selective licensing schemes that apply to all private rented properties within a defined area.

With over a third of London Boroughs operating selective licensing schemes (as of November 2020) and more schemes being developed, this is something all landlords and letting agents need to be aware of.

Part III of the Housing Act 2004 gives councils the power to implement a selective licensing scheme covering all private rented properties within a defined geographical area.

Which properties does a selective licensing scheme cover?

It depends on exactly how the council has drafted the scheme designation. Some schemes cover the whole borough whereas others cover smaller geographical areas.

The size of selective licensing schemes can vary considerably. For example, in Barking & Dagenham the scheme applies borough wide, in Ealing the scheme applies in five council wards and in Hammersmith and Fulham the scheme applies to 100+ streets scattered across the borough.

Within the scheme boundary, all private rented properties will need to be licensed by the council. Failure to comply is a criminal offence that can result in prosecution and a hefty fine or a civil penalty of up to £30,000, so it is important to get things right.

Which councils have introduced selective licensing?

There is no central directory of property licensing schemes so you will need to contact your local council to find out.

If your property is in London, we’ve done all the hard work for you! As of November 2020, there are selective licensing schemes in Barking & Dagenham, Bexley, Brent, Ealing, Hackney, Hammersmith & Fulham, Harrow, Newham, Redbridge, Southwark, Tower Hamlets & Waltham Forest.

To find more information about each scheme you can click on the ‘Select Borough’ link at the top of this webpage and choose the borough you are interested in.

Can any council introduce a selective licensing scheme?

A selective licensing scheme can only be introduced if there are problems with low housing demand or significant and persistent problems of Anti Social Behaviour (ASB) linked to the private rented homes in that area. Given the exceptional levels of housing demand in London, schemes are normally introduced to tackle ASB.

When assessing ASB, government guidance says that councils should consider crime, nuisance neighbours and environmental crime and then assess whether landlords are failing to take appropriate action to help resolve the problem.

In March 2015, councils were given wider powers to implement selective licensing in areas with a high proportion of private rented properties (the Selective Licensing of Houses (Additional Conditions)(England) Order 2015). The proposal must satisfy one of four criteria about poor housing conditions, migration, deprivation or crime. 

Any decision to implement a selective or additional licensing scheme must be consistent with the council’s housing strategy and must be part of a coordinated approach for dealing with homelessness, empty homes and anti-social behaviour. The council must be satisfied that there are no other courses of action that might provide an effective remedy and that the introduction of a licensing scheme will significantly assist in dealing with the problem. As you can see, there is a lot of evidence a council must collect before it can introduce such a scheme.

Before introducing a selective licensing scheme, the council must take reasonable steps to consult with everyone affected by the designation for a minimum of 10 weeks. Under new rules introduced in April 2015, selective licensing schemes covering over 20% of the area or 20% of private rented homes can only be introduced with central government approval.

Are there any exemptions?

You do not need a selective licence if:

  • The property is an HMO that requires licensing under a mandatory HMO or additional licensing scheme;
  • The tenancy or licence has been granted by a registered social landlord under Part I of the Housing Act 1996;
  • The property is subject to an Interim or Final Management Order under Part 4 of the Housing Act 2004 (i.e. the council have taken over the management of the property);
  • The property is covered by a temporary exemption notice; or
  • The property is occupied under an exempt tenancy or licence, as defined in the Selective Licensing of Houses (Specified Exemptions) (England) Order 2006.

Whilst this is not a comprehensive list, examples of some of the exempt tenancies or licences include:

  • Any property subject to a housing prohibition order;
  • Certain tenancies associated with business premises, Licensing Act 2003 premises, agricultural land or agricultural holdings;
  • Buildings managed by a local housing authority, police or fire & rescue authority or a health service body;
  • Buildings already regulated under certain other statutory provisions (Schedule 1 to SI 2006 Number 373)
  • Certain student halls of residence;
  • Holiday homes; and
  • Buildings where an occupant shares any accommodation with the landlord or a member of the landlord’s family. 

Need further advice and support?

If you find the whole licensing process a bit daunting and are based in the London area, we can help you. We offer a fixed price licence application handling service and you can find more information here. We have limited capacity and specialise in more complex cases.

Several other companies offering a licence application handling service can be found in our Landlord Suppliers Directory here.

If you want to learn more about what happens once you submit your application, we have another guide explaining the next part of the process here.

If you still have questions and need expert advice, we can offer a 30-minute telephone consultation, explained here. Following an initial consultation, we may be able to offer more in-depth consultancy support, including the preparation of temporary exemptions, licensing representations and appeals. 

We hope you have found our guide to selective licensing useful. It is important to remember this is not legal advice and you may want to refer to our disclaimer below.

To keep up to date with all the latest housing regulation news, you can sign up to our free London Property Licensing newsletter here.