Selective Licensing, Rising Penalties and the End of Section 21 Notices

We previously provided a detailed analysis of the background to selective licensing and the implications for landlords who have not obtained the requisite licence from the local authority to be able to rent out their properties lawfully. 

There were 46 selective and additional licensing schemes in operation in 2025, and a further 16 planned for 2026, which includes London Borough of Havering.

There are specific requirements on councils who seek to start the schemes and a proposed scheme in Thurrock is currently suspended as it is the subject of a judicial review due to alleged insufficient consultation on the scheme. All related licensing fees already paid by landlords being securely held pending the court’s decision on whether the review can proceed.

In Bolton, a public consultation has just opened on the councils’ proposal to introduce an additional licensing scheme which covers houses in multiple occupation.

The selective licensing requirements for landlords made headline news in the Autumn, when the Chancellor, Rachel Reeves, was found not to have the necessary licence for the home she rented out. In that case the letting agent was at fault for not obtaining the requisite licence but landlords need to take note with new legislation to protect renters coming into force later in 2026. 

With the Renters’ Rights Act 2025, taking effect on 1 May 2026 and no fault evictions officially set to come to an end, some Landlords are panic serving section 21 notices on their tenants to vacate their properties. Landlords who should have applied for a selective licence but have not, will find themselves in a position where they cannot serve a valid section 21 notice. 

We previously talked about the potential consequences failing to apply for a selective licence when a property falls within a designated area, namely that action against a landlord may result in a criminal conviction and a fine or a civil penalty of up to £30,000.  The Renters’ Rights Act 2025 increases civil penalties up to £40,000 for serious or repeat offences.

Additionally, the scope of rent repayment orders (“RRO”s) will be expanded, allowing local authorities and tenants to claim up to 24 months of rent if a landlord is found to have contravened the law.  Currently its up to 12 months’ rent but this will very shortly change.

The enforcement of licensing regulations by local authorities is expected to be streamlined through the creation of a national Private Rented Sector Database, scheduled for implementation in late 2026 as part of phase two of the Renters’ Rights Act. 

All landlords will be required to register with this national database, likely subject to a registration fee. 

What can Irwin Mitchell do to assist?

*  We can provide advice to landlords, managing agents and tenants on the subject of selective licensing, whether or not a breach has occurred

 *  We can assist landlords with the application process for applying for selective licensing.

*  We can advise landlords who face the threat of prosecution and/or financial penalties. We have assisted landlords who have got it wrong to put forward mitigation, which has resulted in significantly reduced financial penalties.