Housing Act 2004 Selective Licensing: How the Law Works for Landlords

The Legal Basis

Selective licensing is a discretionary power under Part 3 of the Housing Act 2004. Section 80 allows local housing authorities in England to designate areas where all privately rented properties — not just HMOs — must be licensed. The scheme targets non-HMO lets: single households, single tenants, and properties with two unrelated sharers.

A council can make a selective licensing designation when it has evidence that an area suffers from one or more of: low housing demand, significant anti-social behaviour, poor property conditions, high levels of deprivation, or high levels of migration creating housing pressure. The designation must be based on robust evidence and supported by a formal public consultation.

The 2024 General Approval

Before December 2024, councils proposing to cover more than 20% of their area or private rented stock needed Secretary of State confirmation for a selective licensing scheme. The Housing Act 2004 General Approval 2024, which took effect on 23 December 2024, removed this requirement.

Councils can now approve wide-scale selective licensing designations through their own Cabinet decision, provided they meet the statutory evidence threshold. This procedural shift has enabled boroughs like Croydon to implement extensive 14-ward designations without central government approval.

How Selective Licensing Differs from HMO Licensing

HMO licensing (Part 2 of the Housing Act 2004) covers shared houses — mandatory for five or more occupiers, additional for three or four. Selective licensing (Part 3) covers everything else in the designated area: single-family lets, single-tenant properties, and two-sharer homes.

The two cannot overlap on one property. Section 79(2) explicitly exempts any property with an HMO licence from selective licensing. A property needs exactly one licence based on its occupancy.

Section 95: The Offence

Section 95(1) makes it a criminal offence to operate a property that requires a selective licence without one. The statutory maximum fine on conviction is unlimited. Under Section 249A (added by the Housing and Planning Act 2016), councils can impose civil financial penalties of up to £40,000 as an alternative to prosecution.

The defence under Section 95(3) protects landlords with a complete ("duly made") application pending with the council against prosecution or civil penalties. The application must include the completed form, required documents and floor plans, and the Part A fee.

The Renters' Rights Act 2025 Connection

The Renters' Rights Act 2025, which took effect in phases from 1 May 2026, intersects with property licensing in several ways:

Rent Repayment Orders expanded. For licensing offences committed on or after 1 May 2026, tenants can recover up to 24 months of gross rent (previously 12 months). This effectively doubles the financial exposure for unlicensed landlords.

Periodic tenancies only. All private lets now run as periodic tenancies, with Section 21 "no-fault" notices abolished. Licence conditions must reflect these changes — terms like "term of tenancy" or "AST renewal" no longer apply.

National PRS Database. Phase 2, opening for London landlords on 15 July 2027, creates a national registration requirement alongside (not replacing) local licensing.

Designation Duration and Renewal

Selective licensing designations last a maximum of five years. In Croydon's case, the CPRPL 2026 scheme runs from 25 September 2026 to 24 September 2031. When a designation expires, the council must decide whether to renew it — and a renewal requires fresh evidence and a new consultation.

Licences granted during a designation cannot outlast it. If the scheme expires and is not renewed, existing licences terminate on the expiry date.

What This Means for Croydon Landlords

Croydon's selective licensing scheme covers 14 wards containing 32,043 private rented dwellings. If your property is a non-HMO let in one of those wards, you need a selective licence for the full five-year designation period. Our Croydon Landlord Licensing Guide explains the ward list, application process, fees, and ongoing conditions.

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