Licensing under the Renters' Rights Act: what changes and what does not

The Renters' Rights Act 2025 is the largest change to private renting in a generation, and it has almost nothing to say about property licensing. That is worth stating plainly, because a good deal of commentary implies otherwise.

What did not change

The licensing regime sits in the Housing Act 2004 and is essentially untouched:

• Mandatory HMO licensing still applies to properties let to five or more people in two or more households sharing facilities. Same threshold, same statute.
• Additional licensing is still designated by councils under section 56, still for HMOs outside the mandatory regime, still five years maximum.
• Selective licensing is still designated under section 80, still for ordinary private lets, still requiring the same evidence and consultation.
• The offence of controlling or managing an unlicensed property is still section 72 for HMOs and section 95 for Part 3 properties.
• The civil penalty is still up to £30,000 under section 249A.
• Licence conditions still bind, and breaching them is still a separate offence from being unlicensed.

If you needed a licence in April 2026, you need one now, on the same terms.

What did change, and why it matters to licensed landlords

Section 21 is gone — which removes a licensing penalty by removing the thing it attached to

Sections 75 and 98 of the Housing Act 2004 barred a landlord from serving a valid section 21 notice while a property was unlicensed. Section 21 no longer exists for new matters, so that particular consequence has less to bite on. It still matters for older matters where a notice was served before abolition.

Do not read that as licensing mattering less. The section 21 bar was always the least of it — the criminal offence, the £30,000 penalty and the rent repayment order are all untouched, and the RRO is the one tenants actually use.

Rent repayment orders got stronger

The Act extended the rent repayment order regime: the maximum award rose to two years' rent for the offences it covers, up from twelve months, and the grounds and the range of people who can be pursued were widened. Letting without a required licence remains an RRO offence.

So the single largest financial consequence of getting licensing wrong became roughly twice as large under an Act that did not change the licensing rules at all. We cover the mechanics in rent repayment orders.

Periodic tenancies change when the licensing clock starts

All new tenancies are periodic from the outset. There is no fixed term, so there is no natural "start of the next term" to organise compliance around — the licence needs to be in place before the property is let, and there is no longer a renewal date that reminds you.

The database and the ombudsman are separate obligations

The Act introduces a national landlord database and mandatory ombudsman membership. Neither replaces licensing, and registering on one does not satisfy the other. A licensed landlord in a designated area will hold a council licence and be on the database and be an ombudsman member. Three obligations, three regimes.

Where the two regimes actually interact

Possession. With section 21 gone, possession runs through the section 8 grounds. Being unlicensed does not bar a section 8 claim in the way it barred section 21, but a landlord bringing possession proceedings in an unlicensed property invites the licensing question into the courtroom, and an RRO counterclaim with it.

Enforcement capacity. Councils enforcing the new regime are largely the same teams enforcing licensing, and licensing is how many of them fund that work.

Standards. The Decent Homes Standard and Awaab's Law obligations overlap heavily with what licence conditions already require. A property brought up to licence standard is most of the way to both.

The practical position

Nothing about the Act makes a licence less necessary or the consequences of not having one milder. The realistic summary is that licensing got quietly more expensive to get wrong — because the RRO ceiling doubled — while the rules for getting it right stayed identical.

Of the 318 councils in England and Wales we track, 87 operate at least one discretionary scheme. That number is rising, for reasons that have nothing to do with the Renters' Rights Act and everything to do with the December 2024 General Approval.