In short: you need a licence if your property is a licensable house in multiple occupation, or if it sits inside a selective licensing area. Letting without one risks a penalty of up to £40,000 and a rent repayment order of up to 24 months.

Updated 21 September 2026

The key facts

  • £40,000 maximum penalty. The civil penalty cap for Housing Act licensing offences rose from £30,000 on 1 May 2026. Propertymark, 13 August 2026.
  • Up to 24 months of rent repaid. A rent repayment order can now reclaim up to two years of rent, double the previous cap. Renters' Rights Act 2025, s.98, in force 1 May 2026.
  • 49 new schemes in 2025. Up from 23 in 2024, split 27 selective and 22 additional HMO. Kamma, January 2026.
  • £2,530 is the highest fee in the country. Lambeth charges the most per property, and the top 50 councils took £327.7m between them. Kamma, 13 March 2025.
  • Councils no longer need ministerial sign-off. The General Approval 2024 removed it on 23 December 2024, subject to a 10-week consultation.

In this article:

  1. What is property licensing?
  2. Do you need a licence?
  3. Why is the number of schemes rising so fast?
  4. How much does a licence cost and how long does it last?
  5. How do you apply for a licence?
  6. Who is responsible for applying?
  7. What are the penalties for letting without a licence?
  8. How can Hello Neighbour help?
  9. Common questions

What is property licensing?

Property licensing is permission from your local council to let a particular home, and it has to be in place before the tenancy starts. It is granted property by property rather than to you as a landlord, so a portfolio of six homes in three boroughs can need six separate licences under three different sets of conditions. It is one of the checks to complete before you advertise, and the full guide to finding a tenant yourself sets out the rest.

There is no national register and no single application. Councils designate their own schemes under the Housing Act 2004, which is why two neighbouring streets can sit under different rules. Each licence carries conditions the licence holder has to meet, typically covering gas and electrical safety checks, management standards, and record keeping.

Do you need a licence?

You need one if your property is a licensable house in multiple occupation, or if it sits inside an area your council has designated for selective licensing. Those are two separate routes and either one on its own is enough to make a licence compulsory.

Type When it applies Where the power comes from
Mandatory HMO Most HMOs occupied by 5 or more people from 2 or more households sharing a kitchen, bathroom or toilet. Applies everywhere in England. Housing Act 2004, s.61
Additional HMO Smaller HMOs, commonly 3 or 4 sharers, where the council has designated the area. Local, not national. Housing Act 2004, s.56
Selective All privately rented homes in a designated area, whatever the property type or how many people live there. Can be borough-wide, ward-wide or a handful of streets. Housing Act 2004, s.80

Schemes overlap. A four-bedroom shared house inside a selective licensing area can fall under an additional HMO designation and a selective designation at the same time, and the council will tell you which one governs. Whether you need a licence depends on the property and who lives in it.

Why is the number of schemes rising so fast?

Because councils stopped needing ministerial approval. The General Approval 2024, issued by the Ministry of Housing, Communities and Local Government and in force from 23 December 2024, gave every local housing authority in England blanket approval for selective licensing designations. Before that, a scheme covering more than 20% of a district or 20% of its private rented homes had to go to the Secretary of State.

A council still has to consult for at least ten weeks, but the ministerial gate has gone, and the numbers moved immediately. Kamma counted 49 new schemes launched in 2025, 27 selective and 22 additional HMO, against 23 in 2024, with a further 12 consultations running. Kamma expects 2026 to continue at the same pace, partly because schemes introduced around 2020 and 2021 are now coming up for renewal and councils are redrawing boundaries instead of rolling schemes over unchanged.

Our reading is that licensing has become something to re-check every year. A property that needed no licence when you bought it can fall inside a new designation without anything about the property itself changing.

How much does a licence cost and how long does it last?

Most licences run for five years, and fees range from a few hundred pounds to £2,530, which is what Lambeth charges and the highest in the country. Councils can issue shorter one or three year licences where there is evidence of poor management or other housing problems.

Kamma's analysis of 13 March 2025 put licensing income across the top 50 councils at £327,737,160, covering roughly 389,000 HMOs. Southwark earned the most at over £23m, ten councils each took more than £10m, and Nottingham was the highest earner outside London at over £18m.

One caveat matters here. Those figures cover the 50 highest-earning councils and the HMOs within them, not every licensed property in England, so read them as the top end of the market. The fee is also only part of the cost: the safety certificates, floorplans and works a council asks for as licence conditions routinely cost more than the licence itself.

How do you apply for a licence?

You apply to the council that covers the property, through its housing department or website, and you pay the fee when you submit. There is no national portal, and the forms, evidence and inspection regime differ between authorities.

Most applications ask for:

  • Proof of ownership, usually Land Registry title or a mortgage statement
  • The tenancy agreement
  • A current gas safety certificate
  • An Electrical Installation Condition Report
  • The EPC
  • Fire safety records and an alarm layout
  • Management details for the agent, the landlord and the company number where one applies
  • Floorplans and property condition photographs

Missing documents are the usual cause of delay, and a delayed application leaves the property unlicensed in the meantime. Gather the certificates before you start.

Who is responsible for applying?

The landlord is, unless a managing agent holds written authority to apply and hold the licence instead. Responsibility for compliance stays with the landlord either way, so appointing an agent moves the paperwork but not the liability.

Some councils require the named licence holder to be based in the UK. If you live overseas, that usually means appointing a UK managing agent to hold the licence on your behalf. Check the individual council's requirement before you assume, because this is one of the conditions that varies most.

What are the penalties for letting without a licence?

Up to £40,000 as a civil penalty, plus a rent repayment order of up to 24 months of rent, and in serious cases a banning order or criminal prosecution. Both of the headline figures went up on 1 May 2026 and a great deal of published guidance still quotes the old ones.

Enforcement route What it means
Civil penalty Up to £40,000 per offence, issued by the council as an alternative to prosecution. The cap was £30,000 until 1 May 2026.
Rent repayment order Up to 24 months of rent reclaimed by the tenant, or by the council where Universal Credit or Housing Benefit was paid. The cap was 12 months until 1 May 2026.
Banning order Serious or repeat offenders can be banned from letting property, and are entered on the national database of rogue landlords.
Prosecution An unlimited fine on conviction for the offence at s.72 for HMOs or s.95 for selective licensing.

Something has changed here that most licensing guidance written before this year still gets wrong. Until 1 May 2026, a landlord of an unlicensed property could not serve a Section 21 notice, under section 98 of the Housing Act 2004. Section 21 was abolished by the Renters' Rights Act and section 98 was repealed alongside it. So that particular consequence has gone.

We do not think that makes licensing less urgent, and it would be a mistake to read it that way. The two penalties that actually cost money both doubled or rose in the same reform, and possession under the new grounds is a court process in which an unlicensed property is not a helpful starting point. There is more on what else changed in our Renters' Rights Act hub.

How can Hello Neighbour help?

We run automated licensing checks against every property we manage, through our partnership with Kamma, whose data underpins several of the figures above. The check tells you whether a scheme applies to your specific address, what the conditions are, and when a designation changes.

That monitoring is the part landlords tend to underestimate. Checking a council website once at the start of a tenancy is a snapshot, and with 49 new schemes in a year and renewals redrawing boundaries, the answer can change during a tenancy you are already in. We also handle the application itself as part of property management, and there is more detail on the enforcement picture in our guide to the licensing crackdown.

Common questions

Do I need a licence if I only rent to one family?
Possibly. Selective licensing applies to all privately rented homes in a designated area regardless of who lives in them, so a single family let can need a licence while an identical property two streets away does not.

Can I let my property while the application is being processed?
Usually yes. A duly made application gives you a defence against the unlicensed letting offence under s.95 while the council decides, but the application has to be valid and complete. Confirm the position with the council before you rely on it.

How much does a licence cost?
Anywhere from a few hundred pounds to £2,530, depending on the council and the scheme. HMO licences are generally the most expensive.

Do I need a separate licence for each property?
Yes. A few councils operate portfolio arrangements, but they are the exception.

How long does a licence last?
Five years in most cases. Councils can issue one or three year licences where they have concerns about management standards.

Licensing is not really a paperwork exercise, whatever the application form suggests. It is the mechanism councils now use to hold the private rented sector to a minimum standard, and the reforms of May 2026 made it considerably more expensive to get wrong. The practical response is to treat it as an ongoing check on every property you own rather than a box ticked once at the start of a tenancy.

Sources

Legislation
Housing Act 2004, s.56 (additional HMO designation). s.61 (mandatory HMO licensing). s.72 (HMO licensing offences). s.80 (selective licensing designation). s.95 (selective licensing offences). s.98, repealed 1 May 2026.

Government
Ministry of Housing, Communities and Local Government, The Housing Act 2004: Licensing of Houses in Multiple Occupation and Selective Licensing of Other Residential Accommodation (England) General Approval 2024, in force 23 December 2024.

Sector
Kamma, licensing revenue analysis, 13 March 2025. Kamma scheme counts reported by LandlordZONE, 6 January 2026. Propertymark, licensing and penalties under the Renters' Rights Act, 13 August 2026.

This is general guidance and not legal advice. It reflects the law in force in England at the time of writing. Licensing requirements are set locally, so confirm the position for your property with the relevant council.

Not sure whether a scheme applies to your property? Run a licensing check.