Licensing of Private Rented Properties

The Housing Act 2004 introduced licensing of privately rented premises, and it is compulsory to license larger higher-risk dwellings. Still, local authorities can also license other types of rented premises, including other lower-risk HMOs and individual houses and flats, if they can establish that other avenues for tackling problems in these properties have been exhausted.

Purpose of Licensing

Licensing is intended to make sure that:

a landlord is a fit and proper person (or employs a manager who is)
each premises is suitable for occupation and
the standard of management is adequate.

This ensures tenants are protected and that the risk of anti-social behaviour is reduced. High-risk premises can be identified through licensing and targeted for improvement by a local authority under the Housing Health and Safety Rating System (HHSRS).

The landlord of a licensable dwelling must apply to the local authority for a licence. The local authority can clarify whether a property is licensable. Suppose the landlord refuses to apply for a licence (or cannot satisfy the fit and proper person criterion) and does not use a managing agent. In that case, the local authority must manage the property instead.

You can find more information about mandatory HMO licensing below and on the GOV.UK website at https://www.gov.uk/house-in-multiple-occupation-licence.

Mandatory Licensing of HMOs

Mandatory licensing applies if the HMO or any part of it:

is occupied by five or more persons,
is occupied by persons from two or more households
and the building is not a purpose-built block of two or more flats.

'Storey' can include commercial premises (for example, below a flat / maisonette) and some attics and basements.

It used to be the case that the building needed to be at least three storeys before a licence was required, but the law changed this from 1 October 2018, whereby storeys are no longer a factor.

Additional Licensing of HMOs

The Housing Act 2004 gives local authorities the discretion to establish additional HMO licensing schemes, to cover smaller types of HMO where management problems have been identified.

Before setting up such a scheme, the local authority must follow the legal process, which includes:

identifying the problems arising from that type of HMO
considering whether any other course of action to deal with the issues is available
ensuring the scheme is consistent with their local housing strategy
consulting with those likely to be affected, including tenants, landlords, landlord organisations etc.

A scheme does not come into effect until three months after it is made, and a scheme may last for up to five years.

Selective Licensing of Other Residential Accommodation

Part 3 of the Housing Act 2004 gives local authorities the discretion to introduce selective licensing schemes to cover all privately rented property (but not HMOs which already require a licence by Mandatory or Additional Licensing). The selective licensing would apply in designated areas that suffer or are likely to suffer from low housing demand and those that suffer from significant and persistent anti-social behaviour. The use of this discretionary power is subject to local consultation.

Before setting up such a scheme, the local authority must follow the legal process, which includes:

identifying the problems arising from that type of property
considering whether any other course of action to deal with the issues is available
ensuring the scheme is consistent with their local housing strategy
consulting with those likely to be affected, including tenants, landlords, landlord organisations etc.

Local authorities require a confirmation from the Secretary of State for any selective licensing scheme which would cover more than 20% of their geographical area or would affect more than 20% of privately rented homes in the local authority area. In addition, the following criteria must be met:

that the area contains a high proportion of properties in the private rented sector, about the total number of properties in the area; and
that those properties are occupied either under assured tenancies or licences to occupy;

And that one or more of the following applies:

the local housing authority considers it would be appropriate for a significant number of the properties to be inspected to determine whether any category one or category two hazards exist on the premises;
that the area has recently experienced or is experiencing an influx of migration into it;
that the area is suffering from a high level of deprivation;
that the area suffers from high levels of crime;

A scheme does not come into effect until three months after it is made and may last five years.

Applying for a Licence

The legislation does not specify exactly who must apply for a licence—only that an appropriate property (as described above) must have one. However, the local authority must be satisfied that there is a manager in place who is either the person in control of the house or an agent or employee of that person.

Where a landlord self-manages the property, the landlord will be both the person in control and the person managing the property, and therefore responsible for applying for the licence.

If a landlord employs an agent on a rent-collection or full-management basis, either the landlord or the agent would be responsible for applying for the licence. Agents should check this carefully to avoid the risk of prosecution by the local authority for failing to apply if the landlord has not done so.

For landlords letting through an agent on a let-only basis, the position was clarified by the Upper Tribunal in Kartal Cetin v Epping Forest District Council (2025). The Tribunal held that an agent whose involvement ends once the tenancy is granted, and who plays no part in ongoing management, is not a "person managing" or "person in control" for licensing purposes—even if the agent collects the first rent payment at the start of the tenancy. In these cases, the duty to obtain the licence remains with the landlord. However, let-only agents should review their role carefully: any continuing rent collection or management activity could bring them within the statutory definition and expose them to enforcement action.

The local authority must grant a licence if it is satisfied that:

The HMO is reasonably suitable for occupation by the number of people allowed under the licence
The proposed licence holder or manager (if there is one) is a fit and proper person
The proposed licence holder is the most appropriate person to hold the licence
The proposed management arrangements are satisfactory
The person involved in managing the HMO is competent, and the financial arrangements for management are suitable.

Fit and Proper Person Test

In determining whether the licence applicant is a 'fit and proper person,' the local authority will take into account several factors, including:

any unspent convictions relating to violence, sexual offences, drugs and fraud
whether the person has breached any housing or landlord and tenant law
whether they have been found guilty of unlawful discrimination.

Licence Conditions

A licence will last for up to five years, and the local authority charges a fee typically to cover the cost of issuing the licence. Some local authorities offer discounts if the landlord is accredited or an application is made with a plan.

The licence will specify the maximum number of people who may live in the property. The following conditions must apply to every licence:

a valid, current gas safety record, which is renewed annually, must be provided (for properties that have gas)
proof that all electrical appliances and furniture are kept in a safe condition
proof that all smoke alarms and emergency lights are correctly positioned and installed
each occupier must have a written statement of the terms they occupy the property. This may be but does not have to be a tenancy agreement.
requiring the licence holder to comply with any scheme related to the storage and disposal of household waste at the HMO pending collection (this condition applies from 1 October 2018).

For a selective licence, there is a requirement for references from prospective occupiers.

The local authority may also apply other conditions of their own, which may include any of the following:

restrictions or prohibitions on the use of parts of the property by occupants
action necessary to deal with the anti-social behaviour of occupants or visitors
ensuring the condition of the property and its contents, such as furniture and all facilities and amenities (e.g. bathroom and toilets), are in good working order and ensuring that specified works or repairs are carried out within certain time limits
for an HMO, a requirement that the responsible person attends an approved training course about any approved code of practice
that the property only is occupied by a specified class of persons (e.g. occupied only by students).

Minimum Room Sizes

Minimum room sizes were introduced by way of conditions in a mandatory HMO licence and, as such, apply to licensable HMOs from 1 October 2018.

For all mandatory HMO licences granted on or after 1 October 2018, mandatory conditions must be attached to the licence by the local authority requiring the licence holder –

to notify the local housing authority of any room in the HMO with a floor area of less than 4.64 square metres.
to ensure that the floor area of any room in the HMO used as sleeping accommodation by one person aged over ten years is not less than 6.51 square metres;
to ensure that the floor area of any room in the HMO used as sleeping accommodation by two persons aged over ten years is not less than 10.22 square metres;
to ensure that the floor area of any room in the HMO used as sleeping accommodation by one person aged under ten years is not less than 4.64 square metres;
to ensure that any room in the HMO with a floor area of less than 4.64 square metres is not used as sleeping accommodation.

In addition to those conditions, the local authority will include further requirements in the licence whereby the licence holder must ensure that –

where any room in the HMO is used as sleeping accommodation by persons aged over ten years only, it is not used as such by more than the maximum number of persons aged over ten years specified in the licence;
where any room in the HMO is used as sleeping accommodation by persons aged under ten years only, it is not used as such by more than the maximum number of persons specified in the licence;
where any room in the HMO is used as sleeping accommodation, it is not used by more than the maximum number of persons specified.

When calculating the floor area, any part of the room in which the ceiling height is less than 1.5 metres is not to be considered.

Where somebody already occupies an HMO room, and a licence is granted from 1 October 2018 (regardless of whether a licence was in place before or not), the local authority must notify the licence holder of the breach and give time to stop the infringement. The time given must not exceed 18 months (but can be less).

Renewing a Licence

If there has been no significant change in the property, you will be asked to renew the licence. Contact the local authority or check their website, which is the easiest way of renewing the licence. The licence holder must request a renewal before the initial licence runs out.

Properties Where a Licence May Be Refused

If the property is not suitable for the number of occupants, is not managed correctly, or the landlord or manager is not a fit and proper person, the local authority will not grant a licence. Suppose the local authority cannot give a property a licence. In that case, the council must make an Interim Management Order (IMO), which will allow the local authority to manage the property (either directly or indirectly through a nominated partner).

The IMO can last for a year until the local authority can make suitable permanent management arrangements. If the IMO expires and there has been no improvement, the council can issue a Final Management Order (FMO) that can last up to five years and be renewed.

Temporary Exemption From Licensing

If the landlord or person in control of the property that requires licensing intends to stop operating as a licensable property or legally reduce the number of occupants below the level that requires a licence and can provide evidence of this, they can apply for a Temporary Exemption Notice (TEN).

A TEN lasts for three months and ensures that the property converted from a licensable property does not need to be licensed. If the situation is not resolved, the landlord can apply for a second Temporary Exemption Notice for three months.

When this expires, the property must be licensed, become subject to an IMO, or cease to be a licensable property. TENs also apply where the licence holder dies. The property will be treated as if it is subject to an exemption notice for three months, during which time the estate can either apply for a new licence or cease to run the property as a licensable property. If it takes longer than the initial three months, the estate can apply for one further exemption notice.

Right of Appeal Against a Local Authority's Decision

A landlord can appeal to the First-tier Tribunal, generally within 28 days, if the local authority refuses a licence, grants a licence with conditions, revokes or varies a licence.

Offences

It is a criminal offence if the landlord or person in control of the property fails to apply for a licence or allows a property to be occupied by more people than permitted under the licence. An unlimited fine may be imposed. In addition, breaking any licence conditions can result in an unlimited fine. The landlord may give no section 21 notice (see later for more information about section 21 notices) concerning a shorthold tenancy of a part of a licensable HMO so long as it remains unlicensed. This means that where a licence is compulsory, unlicensed HMO landlords will be unable to evict their tenants by the notice-only section 21 procedure.

As an alternative to prosecution, from 6 April 2017, the local authority may offer the landlord the option of a financial penalty. The maximum offer is £30,000, which, given that the fines for prosecution are unlimited may be an attractive alternative.

Furthermore, a local authority can apply for a banning order after a licensing offence. A banning order will ban the person from letting housing or acting as an agent (or both) in England.

Rent Repayment Orders

If a landlord operates an unlicensed property from 6 April 2017, in addition to any penalties that may arise from prosecution, a rent repayment order of up to 12 months is available upon application to the First-tier Tribunal by a local authority or tenant. The order is available whether or not the landlord has been convicted of the offence, but the tribunal must be satisfied beyond reasonable doubt that there has been a failure. Rent repayment orders exist for offences committed before 6 April 2017 in a slightly different form.

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