Study Shows Councils Earn £327 million from PRS Licensing – Report & Analysis
Some new research has investigated how much revenue local authorities are generating from their PRS licensing schemes. In this post we will take a closer look at the findings, including who is earning the most money from licensing, and consider what this might mean for landlords and others in the sector.
Background
This research, Licensing Fee Revenue Data, was carried out by Kamma. Kamma is a property licensing data service.
Kamma compiled the data from public registers, local authority websites and Freedom of Information (FOI) requests. It covers 389,000 licensed PRS properties in England, Scotland and Wales. It includes properties licensed under mandatory HMO, additional HMO and selective licensing schemes. Revenue figures have been calculated based on published licensing fees and the number of properties registered under each scheme. Kamma have published the data from the top 50 local authorities, based on their use of and income received from licensing schemes. (For reference there are 371 local authorities across the UK.)
The figures were compiled in March 2025 and Kamma point out that they are liable to change going forward.
Some key findings
£327,737,160 was generated by the top 50 councils through the licensing of 389,000 properties.
10 councils each generated over £10m in licensing fees
London boroughs accounted for 60% of the top 20 highest-revenue councils .
The London borough of Southwark generated the most of any local authority at £23.4m, from their 21,062 licensed properties.
The London borough of Waltham Forest took second place. They generated £18m from their 24,102 licensed properties. (This was also the largest number of properties of any authority.)
Lambeth operates the most expensive mandatory licensing scheme in London according to Kamma, charging landlords £2,530 per property. They earned £11.9m in total licensing revenue.
Outside London, Nottingham made the most licensing revenue at £15.8m.
The other non-London local authorities in the top ten were Edinburgh (£13.7m) and Newcastle upon Tyne (£11.6m).
The extent of licensing schemes
Mandatory HMO licensing, as might be expected, was the most common type of licensing. Every local authority had it. Additional licensing was used by 35 out of 50 authorities. Selective licensing was used by 16 out of 50.
The top ten local authorities for the use licensing schemes (of all types) were, alongside the number of licences issued: Waltham Forest 24,102. Nottingham 23,821. Southwark 21,062. Enfield 18,881. Haringey 18,758. Barking and Dagenham 14,495. City of Edinburgh 12,627. Newcastle upon Tyne 11,470. Portsmouth 8,165. Brent 8,111.
Our analysis suggests it was generally the case that the bigger cities/London boroughs had more licensed PRS properties. But it was not always the case. For example, in London Waltham Forest had three times as many licensed properties as Brent. Outside London Nottingham had twice as many properties as Newcastle upon Tyne. Yet Liverpool was well down the league with 2,499.
The cities/London boroughs in the top 50 with fewest licensed properties were Fife, Croydon, Swansea, Exeter and Kingston upon Thames. These places had, on average, only around 2,000 licensed properties each. (It’s worth noting that the report only presents data from the top 50 local authorities who make use of licensing, which suggests that there are 320 councils who make less use of it.)
Looking more closely at the different types of licensing, while Waltham Forest had the largest number of licensed properties overall (24,102) it was also had the largest number of selective licences (22,410). But it was well down the rankings when it came to the numbers of mandatory and additional licences.
The largest number of additional licences was in Southwark at 7,864. It also had the third largest number of licences overall.
The largest number of mandatory licences was in Edinburgh with 12,627, while it had no other types of licensing. (This likely reflects the differing licensing regime in Scotland.)
Money raised by licensing schemes
Overall, mandatory HMO licensing raised the most revenue at £165.2m. Additional licensing raised £77m and selective licensing raised £85.4m.
The average amount raised by a local authority in the top 50 list, for licensing schemes of all kinds, was around £6.5m each.
The top ten local authorities for revenue raised (all types of licensing) were: Southwark £23.4m. Waltham Forest £18m. Haringey £16.5m. Nottingham £15.4m. Enfield £14.5m. Barking and Dagenham £14m. City of Edinburgh £13.7m. Lambeth £11.9m. Newcastle upon Tyne £11.6m. Camden £10.6m.
Our analysis suggests it was generally true that the biggest users of licensing schemes (such as Waltham Forest, Southwark and Nottingham) also made the most revenue from them. But this was not always the case. Notably, Bristol was 11th in terms of revenue (£9.4m) but 22nd in terms of the numbers of licences.
The cities/boroughs in the top 50 with the smallest revenues from licensing schemes were
Kingston upon Thames, Exeter, Liverpool, Lewisham and Greenwich. These places generated, on average, only £1.6m in revenue from their schemes.
Edinburgh received more money from mandatory licensing than any other city at £13.7m. Southwark received more money from additional licensing than any other place at £10.2m. Waltham Forest received more money from selective licensing than any other place at £15.6m.
The lowest earning licensing scheme (of all types of licensing) was Portsmouth’s additional licensing scheme. It generated just £916 from a single property. (It’s worth noting that the report only presents data from the top 50 local authorities by income from licensing, which suggest that there are 320 councils who generate less revenue from it.)
Some thoughts on this report
The purpose of the Kamma report appears to be to show how much money – which it calls a ‘windfall’ – local authorities are making from PRS licensing. Kamma should be congratulated for the hard work they have put into compiling this data, which is typically very hard to find.
But firstly, and doing our own analysis behind the headline figures, there are some interesting takeaways for landlords and others involved in housing licensing.
Perhaps the key one is that there is very little consistency behind how landlord licensing works. The use of licensing varies across the country. Some local authorities make more use of it – much, much more in some cases – than others.
Of course, this type of licensing is a local authority power so, to some extent, there should be regional variations. But that does not explain why there are such inconsistences between similar places. For example there are great inconsistences between similar London boroughs and great inconsistences between similar regional cities in the extent to which they use licensing.
The inconsistences are even more stark when you look at the different types of licensing. While councils have no choice about applying mandatory HMO licensing, applying additional HMO licensing and selective licensing is optional. And the reality here is that some make extensive use – very extensive use – of these types of licensing and some don’t.
One interesting takeaway perhaps is that in times when selective licensing schemes appear to be multiplying fast there are still many places that do not make extensive use of it.
Now to look back at the original point of the Kamma report – the revenue aspect.
As said earlier, the report appears to be intended to support a widespread belief amongst many people that local authorities are making a lot of revenue from property licensing schemes. £327m is certainly a sizable sum.
Within this one interesting statistic is that there appears to be quite a lot of revenue generating potential in the optional regimes – additional HMO and selective licensing. Collectively councils almost doubled their revenue from additional and selective licensing combined (£162.4m) compared with mandatory licensing alone (£165.2m). Some councils generated considerably more revenue from optional licensing schemes than mandatory licensing – many times more in some cases.
Another interesting statistic is our analysis on how much of their budget PRS licensing raises. For example: The council who earned most from licensing, Southwark, says it will spend £1,249.6m on services this year while it raised £23.4m from licensing – 1.87% of its budget. Greenwich generated least revenue from the top 50. It had spending of £333m last year but earned £1.42m from licensing – 0.42% of its budget. In this context, are property licensing schemes necessarily such big money makers for authorities as might be thought?
Moving on now, what might the future hold for these licensing schemes and the revenue generated by them? The upcoming Renters’ Rights Act will most likely see all these licensing regimes continue pretty much unchanged. But there will be additional enforcement responsibilities for authorities. Some might wonder if some authorities will be tempted to extend their licensing schemes and increase the revenue they earn from them as a result. If so, any future research could produce much more substantial figures for the amounts local authorities generate from the PRS.
Further information
For more information about the report, and to see the full data on numbers of licensing schemes and revenue generated by the top 50 local authorities, visit the Kamma website here: Kamma Data Reveals £327m Licensing Windfall for Top 50 Councils
