WHY DO PROPERTY LICENCES MATTER?
Property licenses are more than just a legal formality—they are a critical tool for ensuring quality and accountability in the rental market. Here’s why they matter:
- A license shows that a landlord is committed to providing a secure and compliant property while also giving tenants peace of mind that their home is safe and well-maintained.
- If you fail to obtain a license for a qualifying property, you won’t be able to serve notice on your tenants or take legal action to regain possession.
- Landlords can be fined tens of thousands of pounds, forced to repay up to twelve months' rent, and, in the case of persistent offences, be banned from renting out property.
It's also worth mentioning that a council can restrict licenses if an area gets overwhelmed, so check their up-to-date rules before you either commit to a purchase, or start converting a property you already own.
WHAT ARE THE DIFFERENT TYPES OF PROPERTY LICENCE?
There are three licensing categories for private rental homes, and the permit you require depends on the type of property, the way it’s configured, and even its location.
- Mandatory licensing applies to all rental homes across the UK with five or more people living there who form two or more households, as these are automatically classed as HMOs.
- Additional licensing covers smaller HMOs with 3 or 4 residents, with terms chosen at local authority level to address specific challenges around housing quality and overcrowding.
- Selective licensing relates to individual streets or areas specified by local councils. In these zones, every rental property, from HMOs to studio flats to family homes, requires a license.
Finally, local authorities can stop issuing licenses in particular neighbourhoods, so if you’re a landlord in Liverpool and unsure of where you stand, call us on 0151 280 4047 for the latest rules.
HOW DO LICENSING RULES DIFFER ACROSS THE UK?
The rules for which rental homes need a license vary not just between England, Scotland and Wales, but also from one local authority to another. Here’s a general overview:
- Every landlord in Wales must register for a landlord licence and complete 5-6 hours of training to obtain a five-year Rent Smart Wales licence.
- All landlords in Scotland need to register with the council covering their property’s location, and licenses usually last for three years.
- In England, mandatory licensing only applies to large HMOs. Additional smaller HMO licensing and selective licensing zones are set by local authorities, with licenses lasting for twelve months.
To end with some good news, using a managing agent allows you to sidestep the need for any training, qualifications or application processes if you’d rather spend your life on other things!
WHAT DOES LANDLORD LICENSING COST?
Landlord licensing costs vary across the UK. Prices are set nationally in Scotland and Wales but devolved to individual local authorities in England.
- The principal fee for registering as a landlord in Scotland is £80, with an additional £18 payable per property registered.
- Landlord registration in Wales costs £187, while the Rent Smart Wales license is £30 when the training is completed online, or £100 in a physical classroom setting.
- In England, the cost is set by each local authority and is generally between £300 and £400. Licences are issued for a period of twelve months, and you have to reapply each year.
Councils are enlisting tenants to catch non-compliant landlords, with fines in the hundreds to thousands of pounds, so it’s really not worth trying to cheat the system given the potential penalty.
HOW DO LANDLORDS APPLY FOR A LICENCE?
Landlord licensing applications can all be made online, and you’ll be asked to supply a number of details depending on where your property is in the UK.
- The full names and addresses of every person or organisation with an ownership interest.
- An Energy Performance Certificate plus safety certificates for gas, electric, CO2 detection and smoke alarms. You’ll probably also be asked for proof of a landlord insurance policy.
- In the case of an HMO, evidence that the accommodation is suitable for the number of occupants, including room sizes, kitchen facilities and sufficient bathrooms.
- All HMOs also need a fire risk assessment, and the local authority may wish to arrange an inspection to ensure all their licensing requirements are met.
- If you own a rental home in Scotland, a legionella risk assessment is also compulsory.
Finally, local authorities consider whether you are a “fit and proper person”, which means having no serious unspent criminal convictions, including offences relating to renting property.
Do you have any questions about landlord licences?
We work with lots of landlords in Liverpool whose rental homes require licences, and we'd love to answer your questions and help you stay on the right side of the law.
Call us on 0151 280 4047 or message us at This email address is being protected from spambots. You need JavaScript enabled to view it. for a friendly, no-strings chat about landlord licensing (or anything buy-to-let).
