Does Your Property Have the Right Licence?

Does Your Property Have the Right Licence?

If you’re renting out a property in London, there’s one question you really can’t afford to gloss over: do you actually have the right licence?

It’s a common (and costly) assumption that licensing only applies to large HMOs. In reality, many London landlords need a licence even for smaller shared homes — and sometimes for single-let properties too. With rules varying by borough, it’s easy to slip up without realising.

Why Licensing Matters

Local authorities across London are under increasing pressure to improve housing standards, and licensing plays a key role in achieving this. As a result, many councils have introduced additional and selective licensing schemes that go beyond national requirements.

Failing to hold the correct licence can result in:

• Civil penalties of up to £30,000
• Rent Repayment Orders covering up to 12 months’ rent
• Complications when refinancing or selling the property

In short, it’s a risk that isn’t worth taking.

The Three Main Types of Property Licence

Mandatory HMO Licence

This applies across England, including all London boroughs.

You will need a mandatory HMO licence if your property:

• Is occupied by five or more people
• From two or more households
• Who share facilities such as a kitchen or bathroom

This is the most widely recognised form of licensing, but it does not cover every scenario.

Additional HMO Licence

Many London boroughs operate additional licensing schemes.

These often apply to:

• Smaller HMOs, typically with three or four occupants
• Properties occupied by two or more households sharing facilities
• Certain converted blocks known as Section 257 HMOs

Each borough sets its own criteria, which means a property may require a licence in one area but not in another – it is vital to check your property’s borough rules.

Selective Licensing

Selective licensing is not limited to HMOs.

In designated areas, councils can require:

• All privately rented properties to be licensed
• Including single-family homes let on a standard AST

This is one of the most commonly overlooked requirements, particularly by landlords who do not operate shared accommodation.

Why You Need to Know

Councils do not accept a lack of knowledge as a valid reason for non-compliance. The responsibility sits firmly with the landlord to ensure the correct licence is in place.

This is particularly important in London, where:

• Licensing schemes vary by borough
• Designated areas can change
• Requirements are reviewed and expanded regularly

How to Check Whether You’re Compliant

Before letting, purchasing, or refinancing a property, landlords should:

1. Check the local authority’s licensing scheme
2. Confirm whether the property falls under:
   • Mandatory HMO licensing
   • Additional HMO licensing
   • Selective licensing
3. Factor licence costs and conditions into their financial planning

While London’s licensing framework can be complex, carrying out the right checks from the start can significantly reduce the risk of costly issues later on.

Final Thoughts

Holding the correct licence is not simply an administrative requirement. It protects your rental income, your asset, and your long-term investment.

Whether you’re letting a shared property or a single dwelling, the safest approach in London is to verify the licensing position before moving forward.

If you’re unsure, seeking advice early is far more cost-effective than dealing with enforcement action down the line. At Orlando Reid, we have extensive experience in property licensing and specialise in keeping your investments fully compliant. Speak to our team to learn more.