Selective licensing of private landlords (England & Wales)

What is selective licensing?

Where selective licensing is in force, all private landlords operating within a designated area must obtain a local authority licence. Penalties apply if landlords operate without a licence in these areas.

Local authorities in England and Wales have had discretion to apply these schemes since April 2006 under the Housing Act 2004.

In England, since April 2015 the Secretary of State’s permission must be sought for any selective licensing scheme covering more than 20% of the authority’s geographical area or where it affects more than 20% of privately rented homes in the area. Local authorities argued the requirement for approval was contrary to the spirit of localism; landlord bodies welcomed the change.

Why are schemes introduced?

Selective licensing was strongly linked to the then-Government’s anti-social behaviour agenda. There was growing concern about areas of low housing demand where landlords were buying properties to let without investing in good standards of management. In turn, this led to concentrations of poorly maintained housing with tenants exhibiting anti-social behaviour and consequent impacts on the local community.

Selective licensing was seen as a way of tackling this issue with authorities setting and enforcing minimum management standards.

Is selective licensing an effective tool?

In 2018 the Government commissioned independent research into selective licensing. The final report (June 2019) said “selective licensing is an effective tool when implemented properly.” The report went on to identify a range of areas where operation and implementation could be improved.

Landlord evidence to the Levelling Up, Housing and Communities Select Committee inquiry into Reforming the Private Rented Sector (PDF) argued the regime is unnecessary, particularly in light of Government reform proposals. Local authorities support its continuance as “an important tool for tackling area-specific issues of poor quality and a crucial source of funding.”

A Government official told the Committee there were “no plans to scrap it” but work will be carried out to minimise duplication with other initiatives.