Selective Licensing Explained: How Schemes Work and What They Cost Landlords
Selective licensing is the scheme that catches landlords who do not run HMOs. Where a council has designated an area under Part 3 of the Housing Act 2004, every private let in it needs a licence, whether it is a one-bed flat let to a single tenant or a family house. Licences last up to five years and cost £612 to £1,318 at the eight councils we checked on 3 October 2026. Letting without one can mean a civil penalty of up to £40,000. This guide explains how schemes are made, who is exempt, what the conditions require and what each council charges.
In this guide
What selective licensing is Selective licensing fees at eight councils Who is exempt What the licence conditions require How to check and apply Penalties Is it worth budgeting for? Frequently asked questions SourcesWhat selective licensing is
England has three kinds of property licensing. Mandatory HMO licensing applies everywhere to five or more sharers. Additional licensing is a council scheme for smaller HMOs. Selective licensing, under Part 3 of the Housing Act 2004, is a council scheme for everything else: a property let to one person, a couple, a family or two sharers, inside a designated area. A property that already holds an HMO licence does not need a selective one too.
A council can designate an area only if it is satisfied that one or more of six conditions applies and that licensing will help. Newcastle City Council's licensing FAQ lists them in plain terms:
- low housing demand;
- significant or persistent anti-social behaviour;
- poor housing conditions;
- a significant number of properties occupied by migrants;
- high levels of deprivation;
- high levels of crime.
Since the General Approval of 23 December 2024 a council in England no longer needs the government to confirm a scheme of any size, but it must consult for at least ten weeks first and publish a notice of designation. A designation lasts no more than five years, after which the council must make a new one if it wants to continue.
Selective licensing fees at eight councils
| Council | Area covered | Since | Standard fee | Lowest fee |
|---|---|---|---|---|
| Birmingham | 25 of 69 wards | 5 June 2023 | £700 | £700 |
| Leeds | Parts of six inner wards | 9 February 2026 | £1,100 online | £950 (Leeds Rental Standard) |
| Liverpool | Designated wards | 1 April 2022 | £704 | £321 with discounts |
| Bristol | Bishopston and Ashley Down, Cotham, Easton | 6 August 2024 | £912 | Less £150 Rent with Confidence |
| Nottingham | Designated area, about 30,000 homes | 1 December 2023 | £950 | £759 accredited |
| Newcastle | Eight areas | April 2025 and 1 October 2026 | £900 | £700 with two £100 discounts |
| Leicester | Parts of five wards, including small HMOs | October 2022 | £1,290 | Discount within six months of purchase |
| Oxford | Whole city, to 31 August 2027 | 1 September 2022 | £853 | £612 accredited |
Read on each council's own website on 3 October 2026; Bristol also runs a separate scheme in Bedminster and Brislington West at £799. Full details in our council guides: Birmingham, Leeds, Liverpool, Bristol, Nottingham, Newcastle, Leicester and Oxford.
Spread over a five-year licence, the standard fees run from £140 a year in Birmingham to £258 in Leicester. Every council splits the fee in two, an application part and a grant part, because of the Gaskin ruling explained in the HMO licence guide. Discounts for accreditation, an EPC of C or above, or applying promptly are common and usually come off the second part.
Who is exempt
The Selective Licensing of Houses (Specified Exemptions) (England) Order 2006 lists the exemptions. The councils' own summaries include:
- properties already licensed as HMOs;
- homes let by registered social landlords such as housing associations;
- student accommodation managed directly by a university or college;
- holiday lets and business premises;
- accommodation let to a family member, as narrowly defined in the Order;
- empty properties, which need a licence only once let.
If you are about to stop letting or have sold subject to contract, a temporary exemption notice of up to three months is available; Leeds and Newcastle charge nothing for one.
What the licence conditions require
Schedule 4 of the Housing Act 2004 makes some conditions mandatory on every licence: produce the annual gas safety record on demand, keep electrical appliances and furniture safe, keep smoke and carbon monoxide alarms working, give the tenant a written statement of terms and take references from prospective tenants. Councils add their own: Leeds requires the gas certificate to be given to each tenant with a written record; Leicester requires linked, mains-connected fire alarms and freedom from Category 1 hazards before it will grant. Most councils also inspect each licensed property during the licence. Price the paperwork with the certificate cost calculator and the EICR guide.
How to check and apply
- Search the council's website for "selective licensing" and check the exact address on its map; boundaries often run through wards.
- Check the exemptions, and whether the property needs an HMO licence instead.
- Tell interested parties, such as your mortgage lender and any joint owner, that you are applying; councils such as Leeds publish a template.
- Apply and pay the first part, then the second part on grant.
- Put the expiry in the compliance calendar. A licence cannot be transferred, so a buyer applies afresh; Leeds expects that within 14 days of completion.
Penalties
Letting a property that needs a selective licence without one is an offence under section 95 of the Housing Act 2004. Councils can prosecute, with an unlimited fine, or impose a civil penalty of up to £40,000 per offence for offences from 1 May 2026, as Birmingham and Leeds state on their pages. Tenants can claim a rent repayment order of up to 24 months' rent. Some councils also limit the licence length, or charge a higher fee, for landlords who applied late. The landlord fines guide lists every penalty, and from 15 December 2026 licence numbers and penalties sit on the landlord database.
Is it worth budgeting for?
For most landlords the fee is the smaller cost. A typical £900 licence is £180 a year over five years, about 1.5 percent of rent on a £1,000 a month let. The conditions, alarms, certificates and inspections, are things a compliant landlord already pays for. The real risk is ignorance of a new scheme, because councils advertise designations but do not write to every owner. Check your council's licensing page at least once a year, and use the rental yield calculator to add the fee as an annual cost.
Frequently asked questions
What is selective licensing?
A council scheme under Part 3 of the Housing Act 2004 that requires every privately rented home in a designated area to be licensed, not just HMOs. Licences last up to five years.
How much does a selective licence cost?
It depends on the council. On 3 October 2026 standard fees ranged from £700 in Birmingham to £1,290 in Leicester, and discounts brought some as low as £321 in Liverpool and £612 in Oxford.
How do I know if my property is in a selective licensing area?
Check your council's property licensing page and its map or postcode checker. Boundaries often cover parts of wards, so check the exact address.
Do I need a selective licence if I have an HMO licence?
No. A property licensed as an HMO is exempt from selective licensing.
What is the fine for not having a selective licence?
Prosecution with an unlimited fine, or a civil penalty of up to £40,000 per offence for offences from 1 May 2026, plus a rent repayment order of up to 24 months' rent.
Sources
Housing Act 2004 Part 3 and Schedule 4; Selective Licensing of Houses (Specified Exemptions) (England) Order 2006; General Approval 2024; Newcastle City Council licensing FAQ; council selective licensing pages for Birmingham, Leeds, Liverpool, Bristol, Nottingham, Newcastle, Leicester and Oxford, linked from each council guide, all read 3 October 2026. See the methodology.