Letting around the UK: What licenses do you need?

Each country in the UK has its own national mandatory licensing requirements for the private rented sector:

England: Any ‘large HMO’ must be licensed. That’s a property housing five or more people from more than one household, who share toilet, bathroom or kitchen facilities.

Wales: Large HMOs must be licensed. That’s the same definition as for England, but with the additional condition that the property has three or more storeys.

Anyone (landlord or agent) letting and/or managing property must apply for a Rent Smart Wales licence.

Scotland: Every HMO must be licensed. That’s any property rented out by three or more unrelated people who share the bathroom or toilet and kitchen.

Northern Ireland: All HMOs require a licence. That’s any property occupied by three or more people forming more than two households.

England: additional and selective licensing

While Scotland, Wales and Northern Ireland only have national licensing laws, it’s more complicated in England, as each local authority can also impose its own licensing requirements. There are two categories:

‘Additional licensing’ powers mean councils can extend the ‘large HMO’ mandatory licensing requirements to smaller HMOs. So the council can require any property shared by three or more people forming more than one household to be licensed.

Then ‘selective licensing’ powers allow the council to require any rented property to be licensed, and it can be incredibly difficult for landlords to know about schemes and keep up with changes:

• Schemes can apply to the whole local authority area, specific wards or boroughs, or even just parts of certain streets
• More than one scheme can be in operation at a time, each with different start and end dates
• Although schemes run as standard for 5 years, they can be introduced, replaced or scrapped with very little notice or publicity.

If you’re found not to have a licence when it’s required, that’s classed as a criminal offence. And although the penalty is unlikely to be severe for a first-time breach, if the council considers it serious enough, they could fine you up to £30,000, issue a rent repayment order or even prosecute you in court.

Some examples of schemes that have recently changed or are due to do so:

• In Greenwich, London:
  • The current borough-wide additional licensing scheme for HMOs is coming to an end on 1^st October this year.
  • Also on 1^st October, a new selective licensing scheme is coming into force for all private rented homes in five wards in the east of the borough. The council estimates that it will receive 4,400 licence applications at a cost of £780 per property, although they’re planning to run an ‘early bird’ discount period, reducing the cost by 60% to £312.
• In the London Borough of Redbridge:
  • The additional licensing scheme ended on 12^th April this year, but the council is currently considering responses to a consultation on the introduction of a new one to replace it.
  • Two selective licensing schemes are currently in operation: one covering two wards, which ends on 12^th July this year, and another covering 12 wards, which runs until 30^th October next year.
  • An added complication is that some ward boundaries have changed since the schemes were introduced! 
• In Bristol:
  • Two separate additional licensing schemes covering 15 wards are in operation for HMOs housing 3 or 4 people
  • On 6^th April this year, a selective licensing scheme came into force for all privately rented properties in the Bedminster and Brislington West wards.

To help you stay up to date, your local authority may have a mailing list for landlords, so check and make sure you’re on it! And if you’re in Greater London, the London Property Licensing website should be very helpful.

But councils in some areas simply aren’t very good at publicising changes. In that case, having a good local agent, who can keep you up to date and help make sure you stay compliant with licensing requirements, can be invaluable.

If we already manage your rental, we’ll let you know as early as possible about any licensing changes in the area.  Meanwhile, if you have any questions about licensing or you’d like to find out more about our Fully Managed service, just get in touch with your nearest Your Move branch and speak to one of the team.