The Basics: Private Rented Property Licensing
Last updated: October 2026
If you own and manage privately rented property, you will almost certainly be subject to property licensing in some form. Property licensing determines a number of the duties you are required to uphold and can restrict what you are able to do with your property. The landscape has changed considerably in recent years, particularly with the phased rollout of the Renters' Rights Act 2025 and the launch of the Private Rented Sector Database from December 2026. This guide sets out the current position.
What is Property licensing?
Property licensing provides a legal framework that enables local housing authorities (councils) to regulate the condition and management of private rented properties. The purpose is to ensure that rented properties meet minimum standards and that those running them are 'fit and proper' persons to do so. There are three types of licensing in England: mandatory HMO licensing, additional HMO licensing, and selective licensing.
What is a House of Multiple Occupation?
A property is an HMO if it is occupied by three or more tenants who form two or more households and the tenants share some or all of the toilet, bathroom, or kitchen facilities. A household is a single person, members of the same family living together, or an unmarried couple.
Mandatory HMO licensing
A property is a licensable large HMO if all of the following apply:
It is occupied by five or more people who form more than one household.
Some or all tenants share toilet, bathroom, or kitchen facilities.
At least one tenant pays rent (or has their rent paid for them by their employer).
A landlord of a licensable HMO must obtain a licence from the local housing authority before letting the property. Operating a licensable HMO without a licence is a criminal offence and attracts significant penalties, which we cover below.
Additional HMO licensing
A council has powers to designate the whole or part of its district as subject to additional HMO licensing. This typically brings smaller HMOs (occupied by three or four people in two or more households) within the licensing regime. The number of councils operating additional licensing schemes continues to grow, particularly in London and larger urban areas, and the designations are reviewed and renewed on a five-year cycle.
Selective licensing
Selective licensing applies to all privately rented properties within a designated area, including single lets that would not otherwise require a licence. Councils may designate an area for selective licensing where they consider it will help tackle issues such as anti-social behaviour, poor housing conditions, high crime, high levels of deprivation, high migration, or low housing demand.
Selective licensing designations have expanded significantly in recent years. According to recent sector data, 2026 is on course to be the biggest year on record for new selective and additional licensing schemes. London has been particularly active, with new schemes recently confirmed, consulted on, or challenged across multiple boroughs including Islington, Medway, Croydon, Great Yarmouth, Telford and Wrekin.
The HMO Management Regulations
Landlords of HMOs in England, whether licensed or unlicensed, must comply with the Management of Houses in Multiple Occupation (England) Regulations 2006. These remain in force unchanged. The regulations set out specific duties on the HMO manager, who may be the landlord or an appointed person such as a letting or managing agent.
In summary, the regulations require the manager to:
Provide information to occupiers (Regulation 3).
Take safety measures, including fire safety (Regulation 4).
Maintain water supply and drainage (Regulation 5).
Supply and maintain gas and electricity, and provide safety certificates to the local authority within 7 days of request (Regulation 6).
Maintain common parts, fixtures, fittings, and appliances (Regulation 7).
Maintain living accommodation (Regulation 8).
Provide waste disposal facilities (Regulation 9).
Regulation 10 sets out the duties of occupiers themselves.
Obtaining a licence
Licence applications are made to the local council, usually through an online portal. Each council sets its own fee structure and application requirements, including Amenity Standards that specify the minimum room sizes, kitchen and bathroom provision, fire safety measures, and other conditions required for a licence. These vary considerably between authorities, so a licence application that would be straightforward in one borough may be more involved in another.
Most licences are granted for five years, though shorter durations are sometimes issued where the council has specific concerns, for example where appropriate planning permission is not in place.
Licences are not transferable. If a landlord acquires a property that already has a licence, the existing licence must be revoked and a new one obtained in the new owner's name.
Minimum room sizes
Mandatory HMO licence conditions set minimum floor areas for rooms used as sleeping accommodation:
One person aged over 10 years: not less than 6.51 square metres.
Two persons aged over 10 years: not less than 10.22 square metres.
One person aged under 10 years: not less than 4.64 square metres.
Failure to comply with these conditions is a breach of the licence and an offence. Temporary arrangements such as occasional overnight visitors do not count, but a permanent change in occupancy would need to be addressed by the landlord.
Licensing of larger HMOs
New legislation, which came into effect from October 2018, amended the definition of mandatory licensing.
Landlords must have a licence if renting out a large HMO in England or Wales.
The property is defined as a large HMO if all of the following apply:
It is rented to 5 or more people who form more than 1 household
Some or all tenants share toilet, bathroom or kitchen facilities
At least 1 tenant pays rent (or their employer pays it for them)
A landlord of a large HMO must obtain a licence from the local housing authority to operate the HMO. More information about licensing can be found at gov.uk or on the relevant local authority website.
Planning and HMOs
Planning rules apply to HMOs alongside licensing. A single-household dwelling falls into Use Class C3 under the Town and Country Planning (Use Classes) Order 1987 (as amended). An HMO occupied by three to six residents falls into Use Class C4. HMOs occupied by more than six people are Sui Generis and require planning permission for that specific use.
Where a council has made an Article 4 direction, the permitted change from C3 to C4 is removed and planning permission is required to create any HMO, including smaller ones. Article 4 directions are becoming more widespread, and recent research suggests they roughly halve a landlord's prospects of winning an HMO planning appeal.
The Renters' Rights Act 2025 and enforcement
The Renters' Rights Act 2025 has significantly strengthened the enforcement regime for property licensing offences. The headline changes are:
The civil penalty ceiling under section 249A of the Housing Act 2004 has been uprated from £30,000 to £40,000 per offence. This applies to a wide range of housing offences including operating an unlicensed HMO or selective-licensable property and breaches of licence conditions.
Rent Repayment Orders are now available for up to 24 months' rent (previously 12 months), substantially increasing the exposure for landlords operating unlicensed properties.
Councils have expanded investigatory powers and are being resourced to enforce more actively, with government 'new burdens' funding supporting proactive enforcement work.
A new section 6A regime provides for civil penalties of up to £7,000 for Category 1 hazards identified through HHSRS assessments, in force from June 2026.
The practical effect is that landlords operating without a required licence, or in breach of licence conditions, face materially greater risk than they did under the pre-2025 framework. We cover the civil penalty regime in more detail in our dedicated article on enforcement under the RRA 2025.
The Private Rented Sector Database
A further significant development is the launch of the national Private Rented Sector Database from December 2026. The database will begin its phased regional rollout in the West Midlands from 15 December 2026, with a registration fee of £65 per property, rolling out to other regions through 2027. Registration on the PRS Database will be a legal requirement before letting a property in a designated area. Failure to register before letting attracts a civil penalty of up to £7,000, rising to £40,000 or criminal prosecution for repeat breaches. The PRS Database does not replace mandatory HMO, additional, or selective licensing. Landlords operating in designated areas may need to be both licensed and registered. The two regimes will operate alongside each other.
Why licensing compliance matters
Operating an unlicensed property is a criminal offence. In addition to the civil penalty of up to £40,000 or prosecution and an unlimited fine on conviction, other consequences include:
A Rent Repayment Order of up to 24 months' rent, which can be applied for by tenants or by the local authority.
Inability to serve a valid notice to end an Assured Shorthold Tenancy where the property should have been licensed (noting that section 21 notices have themselves been abolished under the RRA 2025 for new tenancies).
A banning order and inclusion on the government's Rogue Landlord Database for repeat offenders.
Difficulty selling, re-letting, or re-mortgaging the property while enforcement action is pending.
Breach of the HMO Management Regulations is a separate offence and can attract its own civil penalty of up to £40,000 per breach under the uprated s.249A regime.
How Surrey Property Licensing can help
Property licensing is a complex area and we work with landlords, agents, solicitors, and enforcement teams across London, the South East, and nationally. Our services include:
HMO licence applications (mandatory and additional schemes) and selective licence applications.
Representations against proposed licence conditions during the application process.
Temporary Exemption Notice (TEN) applications under both Part 2 (section 62) and Part 3 (section 86) of the Housing Act 2004.
Licence refusal appeals and conditions disputes.
Civil penalty representations and First-tier Tribunal appeals.
HHSRS assessments and reports, including as a check against proposed enforcement.
Expert witness work in licensing, disrepair, and civil penalty cases.
For an initial discussion of how we might be able to assist please call 01483 608975 or use our contact form.
