Selective Licensing
A council-designated scheme requiring ALL private rented properties in an area to be licensed, regardless of size or type. Operating without one is an offence.
Selective licensing is the third tier of property licensing in England. Unlike mandatory HMO licensing (large HMOs, nationwide) and additional licensing (smaller HMOs, where a council adopts it), selective licensing covers every private rented property in a designated area, including ordinary single-family lets.
How schemes work
Councils designate areas for up to five years, typically citing poor housing conditions, high deprivation, or anti-social behaviour. Licences are per property, carry a fee, and come with conditions covering matters like gas safety, tenant references, and property management.
The risks of missing it
Letting an unlicensed property in a selective licensing area is an offence, with civil penalties and exposure to a rent repayment order of up to 24 months' rent. Licensing failures can also complicate possession claims.
The catch is that schemes appear and lapse street by street. A property that needed no licence when you bought it can fall inside a new designation a year later, and councils do not always write to landlords. Check the council's licensing register for every property at least annually and before every new tenancy, and factor the fee into your yield calculation.