Important Changes to Selective Licensing: General Approval 2024

A small but very important change has just been made to the rules on introducing a selective licensing scheme in England. We will look at this change here, and at what it might mean for landlords and the wider housing sector.

Selective licensing – a quick recap

Selective licensing gives local housing authorities the power to designate an area within which all PRS properties require a licence. It is a power granted under Section 80, Part 3, of the Housing Act 2004.

Local authorities must have a reason (or reasons) for introducing selective licencing. These reasons are defined in law. They include, amongst other things, that poor housing conditions exist. Local authorities must follow a specified procedure when introducing a scheme.

Very importantly, until now, approval (or confirmation) from the Secretary of State for Housing, Communities and Local Government was required in most circumstances. This was if the scheme covered 20% or more of properties or 20% or more of the authority’s geographical area. This also applied when extending the scheme beyond an initial five year period.

What has changed – the General Approval 2024

As from 23 December 2024 local housing authorities in England are no longer required to obtain confirmation from the Secretary of State before implementing a selective licensing scheme of any size. They can bring them in entirely at their own discretion – as long as the rules which apply to them are followed.

The Ministry of Housing, Communities and Local Government has done this by introducing what is known as the General Approval 2024 and publishing a guidance document to explain it. This is not a new law as such. It has been done under the powers the Secretary of State has to make such changes.

It is important to note that, apart from this change, under the General Approval 2024 the vast majority of rules around selective licensing schemes have NOT changed.

What else is important to know

The General Approval 2024 has also brought a few procedural changes. The government says this is ‘to support local accountability and transparency’:

• There must be a consultation. This was done before but now this must involve the mayor in places where there is a mayoral authority.

• The local authority must provide the MHCLG with data on their selective licensing scheme at two points in time – upon commencement of the scheme and at the scheme end or within 12 weeks of it. (In practice the MHCLG has always received information about selective licensing schemes.)

• The local authority must publish the outcome of the selective licensing reviews they undertake on their website. (Schemes were usually reviewed in year 4 at the latest anyway and the information generally made public.)

A refresher on the rules of selective licensing

Apart from the General Approval 2024 the rules for the introduction and operation of selective licensing have largely not changed. We will recap on the main rules here.

Selective licensing schemes may only be introduced if one or more grounds are met. These terms are defined in the Act but broadly they are that the area must: Have low housing demand (or is likely to become such an area). Have a significant and persistent problem caused by anti-social behaviour. Have poor housing conditions. Have high levels of migration. Have high levels of deprivation. Have high levels of crime. Local authorities should be able to demonstrate that these situations exist.

Where the grounds include poor housing conditions and/or migration, deprivation or crime then selective licensing is only appropriate if there is a high proportion of housing in the PRS. This is defined as 19% or more of properties. In any case, the properties referred to must be occupied on ASTs or licences.

Very importantly, the local authority must have objectives when introducing a scheme, eg. such as to improve housing conditions. They must consider other courses of action too. For example, where anti-social behaviour affects only a small number of properties a Special Interim Management Order may be more appropriate. The scheme must also be part of an overall housing strategy. It must be co-ordinated with other interventions. For example, work to deal with homelessness or anti-social behaviour.

There are rules on holding consultations with interested parties, which the General Approval confirms must last for at least 10 weeks. And on responding to replies and publishing the results. There are rules on the notice which must be given before a scheme is introduced (a minimum of three months) and on publishing details of the commencement of the scheme. Schemes may last up to a maximum of five years.

As mentioned, the General Approval 2024 has added new requirements to compile and provide specific data to the MHCLG. This includes details of the coverage of the scheme, supporting data and – at the end of the scheme – details of a scheme’s effectiveness and costs. (In practice much of this happened previously anyway.)

Possible implications of these changes

Next let us consider what some of the possible implications of the General Approval 2024 might be.

Will there be more selective licensing?

The number of selective licensing schemes has increased rapidly, particularly over the last couple of years. There seems no limit to the desire of many local authorities to introduce more and extend existing ones. (Some will say this is done for financial reasons, but that is another matter.)

So it seems very likely many local authorities will take up the opportunity to try and introduce more – now they no longer have to get formal approval. Also very relevant is that it might see more existing schemes renewed, perhaps with limited scrutiny, when their five year term ends.

It is important to note though that local authorities will not have a free hand to introduce selective licensing without limit. They will still have to follow the rules when considering, introducing and operating a scheme. In other words, local authorities should not be able to introduce any schemes that they wouldn’t have been able to previously.

The new data requirements – thoughts

While local authorities will have to justify their schemes by providing specific data to the MHCLG at the start and end of them many people will wonder how this will work in practice. Local authorities do not always have the best reputation when it comes to compiling and publishing data. On the other hand, some might argue that skilful use of data can be used to justify almost anything.

Another question surrounds how the MHCLG will use the data received from local authorities on their selective licensing schemes. Presumably they will have the power to cancel a scheme if the data does not support it as being necessary or is deficient. However the General Approval document says nothing about this. It might take some time for this to become apparent.

Enforcement issues

Handing more responsibility for introducing selective licensing to local authorities is in line with the new government’s devolution agenda. It will relieve the MHCLG from something they would perhaps rather not be involved with. Yet at the same time it has created a new workload and potential source of problems for local authorities – and perhaps the ministry too.

In addition the more selective licensing schemes are introduced the greater the strain on already limited local authority enforcement resources. The upcoming Renters’ Rights legislation will also add to this considerably.

The Renters’ Rights Bill

Although some people thought that provisions in the Renters’ Rights Bill, such as the planned PRS Database, would make selective licensing obsolete the government has confirmed this will not be the case. Selective licensing will continue. The fact General Approval has been brought in now also tends to confirm that.

So how will the new rules on selective licensing work when the Renters’ Rights Bill becomes law? To offer just a few examples: Will data from the new PRS Database be used to inform selective licensing (and other) decisions? How will data from local authorities’ new responsibilities to report on their enforcement activities be used? There is likely to be something of a data overload upcoming. Will local authorities be able to cope with it?

Under the new Renters’ Rights rules tenants will have periodic tenancies and landlords will have limited rights to evict. If a local authority introduces a selective licensing scheme, but a landlord’s property does not comply with the licensing conditions (but was compliant before), what will happen then?

It is probably fair to say that as yet much is not known about how the new General Approval rules will work. Some might say that, as with the Renters’ Rights Bill generally, the new rules have not been thought through as well as they might have been.

So, in summary, what should landlords do in light of the new rules on selective licensing?

A good approach might be, while staying fully informed on the new rules and how they are applied, to carry on as normal for now. And of course take expert advice on any licensing issues and problems you encounter.

Further information

The full guidance document issued by the MHCLG can be read here.