What is a selective licensing scheme for landlords in the UK?

Full answer

Selective licensing is a scheme under Part 3 of the Housing Act 2004 that allows local housing authorities in England and Wales to designate specific geographical areas where all private landlords must hold a licence for each property they rent out -- not just landlords of houses in multiple occupation (HMOs). How designation works: a local authority can designate an area for selective licensing if it can demonstrate the area has: low housing demand; significant and persistent anti-social behaviour problems; high levels of deprivation; significant migration (newly introduced ground); or poor property condition. Designations affecting more than 20% of a council's private rented sector (or more than 20% of its geographical area) require Secretary of State approval in England. Many councils have multiple smaller designations that fall below this threshold. Licence requirements: landlords in a selective licensing area must apply for a licence (usually per property) and pay a fee. Typical fees: GBP 300-GBP 700 per property per 5-year licence, though some councils charge more. To obtain and keep a licence, landlords must demonstrate they are 'fit and proper persons,' that the property meets minimum physical standards, that they have satisfactory management arrangements, and that they respond appropriately to tenant anti-social behaviour. Consequences of non-compliance: 1. Operating without a licence is a criminal offence under the Housing Act 2004, carrying an unlimited fine on conviction. For civil penalties, authorities can issue fines up to GBP 30,000 per property. 2. Rent Repayment Orders (RROs): tenants (or local authorities on behalf of tenants) can apply to the First-tier Tribunal for an RRO requiring the landlord to repay up to 12 months of rent received while the property was unlicensed. This is a powerful tenant remedy. 3. A Section 21 'no-fault' notice (while this still exists in some form) may be invalid if served while the property is unlicensed. HMO licensing versus selective licensing: HMO licensing (under Part 2 of the Housing Act 2004) is mandatory for large HMOs (3 or more storeys, 5 or more occupants forming 2 or more households) nationwide. Additional HMO licensing extends this to smaller HMOs in designated areas. Selective licensing covers all private rented properties (including single-occupancy) in a designated area, regardless of whether they are HMOs. Finding out if your property is in a selective licensing area: check your local council's website. Councils are required to publish the boundaries of designated areas and the licence conditions. There is no single national register of all selective licensing schemes in England, though the National Residential Landlords Association (NRLA) maintains a database. Scotland has its own landlord registration scheme (mandatory registration for all private landlords) which has different rules from selective licensing in England and Wales.

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