Renters’ Rights Act raises the cost of getting licensing wrong
Although licensing continues to operate under the Housing Act 2004, the Renters’ Rights Act has strengthened the consequences of non-compliance.
From 1 May 2026, the maximum civil financial penalty for relevant Housing Act offences increased from £30,000 to £40,000. These offences include operating an HMO or other property without a required licence and failing to meet licence conditions. A civil penalty can be imposed as an alternative to prosecution.
Liability for operating an unlicensed property has also been widened. Depending on the circumstances, action may be taken against the person managing or controlling the property and landlords higher up in a rent-to-rent chain.
Failure to obtain a required licence could also lead to a rent repayment order. Councils and tenants can seek repayment of up to two years’ rent, and the Act has extended orders to superior landlords in appropriate cases.
The PRS Database must reduce duplication
The UK Government intends to begin a regional rollout of the PRS Database from late 2026. Registration will be compulsory, landlords will pay an annual fee, and the system is expected to contain property, ownership, and safety information.
The database should provide councils with better information to identify unlicensed properties and target enforcement. However, it will not automatically replace selective, additional or mandatory HMO licensing.
We support a national landlord and property register that helps responsible businesses demonstrate compliance and allows councils to focus on the highest-risk cases. However, landlords and agents must not be asked to submit the same information repeatedly to national and local systems.
Licensing must be evidence-led and proportionate
We believe licensing schemes must have clear aims, be supported by robust local evidence and show measurable improvements. Fees and enforcement policies should be transparent and consistent, while councils should recognise professional agents and accredited landlords who already work to high standards.
Schemes should not duplicate existing regulation or place unnecessary financial and administrative burdens on responsible businesses. Councils must also demonstrate that they have sufficient resources to inspect properties, enforce conditions and pursue those who deliberately operate outside the law. Simply collecting licence fees will not improve housing standards.
Landlord Licensing
We do not believe that selective licensing schemes are an effective way of promoting higher quality accommodation. Find out why we believe this and why a collaborative approach is needed.
Licensing and Article 4 controls serve different purposes
Three different systems feature in current proposals which are out for public consultation:
- Selective licensing can require most privately rented homes within a designated area to have a licence, even if they are not HMOs.
- Additional licensing brings smaller HMOs outside the national mandatory scheme into local licensing.
- Article 4 Directions remove permitted development rights. When applied to HMOs, they normally mean that planning permission is required to convert a family home into a small HMO occupied by three to six people.
Licensing and planning are separate, so an HMO may need both planning permission and a property licence, depending on its size, use, and location. The Renters’ Rights Act has not removed either requirement.
Proposals under consideration
Ealing Council is consulting on a replacement borough-wide additional licensing scheme to begin when its current scheme expires on 31 March 2027. The proposed fee is £1,300 for a three- or four-person HMO and £1,100 for a Section 257 HMO. Discounts of £75 are proposed for accredited landlords, including full Propertymark members, and £50 for eligible properties with an EPC rating of A–C.
The consultation closes on 24 September 2026. View the Ealing proposals.
Preston City Council has proposed that a five-year licence would cost £1,050, split into payments of £470 and £580. No discounts or instalment arrangements are proposed.
The council has acknowledged possible overlap with the forthcoming Private Rented Sector (PRS) Database and says it will consider national developments before making a final decision.
The consultation closes on 11 October 2026. View the Preston consultation.
Burnley Borough Council proposes to redesignate the existing schemes and introduce a new designation. The standard proposed fee is £774 for a landlord’s first property and £692 for each further property. A £100 early-application discount would apply to the first application, while members of the council’s Good Landlord and Agent Scheme could receive a 30% reduction on the second part of the fee.
The consultation runs until 18 October 2026. View the Burnley proposals.
The Royal Borough of Greenwich proposes replacing its current selective licensing scheme with one covering 18 wards. The proposed five-year fee is £974 per property, with a 10% discount for membership of an approved accreditation scheme.
The consultation closes on 12 October 2026. View the Greenwich consultation.
Stoke-on-Trent City Council has announced plans for a city-wide Article 4 Direction and an additional HMO licensing scheme, subject to the required approvals and consultation.
The planning proposals would include limits on HMO concentrations within individual wards and within a 50-metre radius. The additional licensing scheme would bring smaller HMOs into the licensing system and strengthen existing conditions. Members operating in the city should watch for the start of the statutory consultations. Read the council’s announcement.
Reigate and Banstead Borough Council is consulting on a borough-wide Article 4 Direction that would require planning permission to convert a family home into an HMO occupied by three to six people. Larger HMOs already require consent.
The consultation closes on 24 September 2026. View the Reigate and Banstead consultation.
Tell us what is happening in your area
We encourage members to respond directly to consultations affecting their businesses and clients. We also want to hear about licensing or Article 4 proposals in other areas.
Please share details with our Policy and Campaigns team, including proposed fees, licence conditions, expected administrative work, effects on rental supply, and any duplication with the PRS Database, by emailing [email protected]. This evidence will support our engagement with councils and the UK Government.
