Being a landlord has its challenges.
But it’s also one of the most popular ways to build up wealth.
To become a landlord in the UK, you must often meet specific requirements. One of these relates to getting a landlord licence.
When is this needed? And how do you obtain one?
Read on to find out.
What is a landlord licence?
A landlord licence is a type of permit that landlords sometimes need in the UK.
It isn’t necessary in all parts of the UK or under all circumstances.
But there are a few key instances when you’ll need a landlord licence to rent out a property.
Three main instances when landlord licenses are needed
1. Selective Licencing
The Housing Act of 2004 allows councils to make a landlord licence compulsory in a specific area.
This is known as selective licencing. The council can decide whether you meet their requirements to let out a house in the area.
HMO-related licences
They could also impose specific health and safety rules for your building.
There are two other types of landlord licencing.
These both relate to Houses of Multiple Occupation (HMO).
2. Mandatory HMO Licence
As the name suggests, a Mandatory HMO Licence is a legal requirement.
You need this if you buy a HMO with five or more residents and at least two separate households.
This applies to all parts of the United Kingdom, with only a few exceptions.
3. Additional HMO Licence
A local authority can implement an Additional HMO Licence.
This means you need a licence to let out an HMO, even if it doesn’t meet the criteria listed under the ‘mandatory’ category.
In other words, you can be forced to get a licence if:
- You have only four residents in your HMO
- If everyone is from the same family.
Do I need a landlord licence?
You should contact your local council to determine whether you need a landlord licence.
The location of the property you’re letting out could make it compulsory.
But if you’re letting out an HMO, you might need one regardless of the circumstances.
Getting multiple licences
You get one licence for each property that you let out.
So, even if you’re letting out several properties in the same area, you’ll need to make multiple applications.
How to get a landlord licence
Check your local council’s website
You can apply for a landlord licence through your local authority’s website.
You must know the area in which you’re buying/letting the property, as that’s the council website you’ll need.
Gather essential information
As part of your application, you’re asked to give essential information such as:
- Floorplan
- Room sizes
- Details of all interested parties – e.g., leaseholders, freeholders, mortgage companies, etc.
- Proof of building insurance
- All electrical certificates, along with an EPC.
These are just a few examples. Some councils ask for much more, including your criminal record and history with letting out properties.
Get legal support
It’s often worth getting support from a legal expert for your application. This ensures you have everything you need and don’t make a mistake.
Take on feedback
If your application for a licence fails, the council should give feedback about why.
You’ll then have the chance to fix these issues before making a new application.
Does it cost money to get a landlord licence?
Yes. You need to pay a fee when you make your application. Each council sets their price for this.
- In Southwark, a mandatory HMO licence costs £1,500 and an extra £100 for each bedroom above five
- In Tower Hamlets, it costs £600 per licence
- And in Newham, East London, the fee for a selective licence is £750 (this lasts up to 5 years).
Outside of London, the fees aren’t always lower.
For example:
- In Nottingham, it costs £887 for non-accredited landlords.
But in other places, the price falls considerably.
- Newcastle City Council only charges £300 for an additional or mandatory HMO licence.
Make sure you check the relevant council website to see what the fee is. If you can’t find the number, contact them directly and ask.
Can a landlord licence be revoked?
Yes, your landlord licence can be revoked in some situations.
This often coincides with a fine or some other punishment, such as being banned from letting property in the area again.
If you’ve lied in your application for the licence, and it’s found out, you’ll have your licence revoked.
The same applies if you break the terms of the licence. Your licence can also be revoked if your property no longer meets the legal standards.
If the local council contacts you, saying they’re considering revoking your licence, get legal support immediately.
You can often appeal if you have a strong case. You’re also entitled to a notice of intention, followed by a 14-day consultation period.
What happens if I don’t have a landlord licence?
It’s a legal requirement to have a landlord licence if your local authority says so.
You could be breaking the law if you fail to meet this obligation – especially if you do it knowingly.
If you can demonstrate that you didn’t know you were breaking the law, the punishment may be limited.
In some cases, you can also apply for an exemption from HMO licencing rules in advance.
If you don’t have the necessary landlord licence, you can’t issue a Section 21 eviction notice to repossess your property.
Sanctions for failing to have a landlord licence can be serious. You could be subject to a rent repayment order, where you must repay your tenants 12 months’ rent.
You could also be banned from letting out a property again. And sometimes, you’ll be fined anywhere up to £30,000.
Can I get a landlord licence before I need one?
No. Not all local councils have a landlord licencing scheme. And you need the details of the property you’re letting out to make the application.
Can a tenant ask for proof of my landlord licence?
Yes, your tenant can ask for this. They have the right to know that the property is being let out legally.
If you fail to provide it, they could report you to the local authority.
