Managing Selective Licensing with Spreadsheets? Why UK Letting Agents Need Automation

When Chancellor Rachel Reeves made headlines in October 2025 for breaching local licensing rules, it was her letting agent who took the blame. The agency's failure to identify licensing requirements for their high-profile client reflects a broader challenge across the entire private rented sector.

For the last few years, the UK's licensing landscape has expanded beyond the well-known 'mandatory HMO licensing', and local councils are increasingly adopting 'additional' and 'selective licensing' schemes that apply to far more property types than many managing agencies realise.

As enforcement is set to increase with the implementation of the Renters' Rights Act, the days of guessing whether a property needs a licence are definitely over.

Types of Licensing

Licensing started in 2006 when councils just wanted to track Houses in Multiple Occupation (HMOs) under the Housing Act 2004. Now, the scope has significantly expanded. More councils introduce schemes monthly, and there are now three main types that may apply, depending on the property type and location:

Mandatory HMO Licensing

Mandatory licensing applies universally to larger HMOs, targeting properties with five or more occupants forming two or more households, regardless of location. These licences include minimum standards relating to safety, management and amenities.

Additional Licensing

While the previous licence only applies to 'large' HMOs, local councils can impose additional licence requirements on smaller HMOs: properties rented by at least three tenants who form more than one household and share toilet, bathroom or kitchen facilities. 

This happens where councils believe such HMOs in an area are being poorly managed or causing problems for tenants or the wider community.

Selective Licensing

Local councils can also impose a selective licence on any privately rented property, including standard single-let properties or studios in targeted wards. Councils usually introduce it to address specific issues in an area, such as poor housing conditions, anti-social behaviour or low housing demand.

The year 2025 marked a pivotal moment in the country, with 49 new selective and additional licensing schemes. In 2026 we can see already 16 new or expanded licensing schemes set to launch.

London sits at the epicentre of licensing schemes, with 28 out of 32 boroughs now enforcing. Other hotspots include Westminster, extending to 15 wards from November 2025, and ongoing expansions in Islington, Waltham Forest, Lambeth, Southwark, Enfield and Havering.

With this increased number of schemes, the risk of an agency breaking property licensing rules without knowing has never been higher, and comes at a cost.

The Costs of Failing Property Licensing

Chancellor Reeves escaped with only an apology. Letting agents aren't so fortunate:

Fines

Under Section 249A of the Housing Act 2004, a person who has control of or manages unlicensed HMOs or privately rented property is subject to a civil fine of up to £30,000.

For instance, in January 2026, Haringey Council fined both a landlord and the managing agent a combined £12,500 for operating an unlicensed additional HMO in Tottenham and breaching safety regulations. The managing agent was ordered to pay £10,000, while the owner was ordered to pay £2,500.

Rent Repayment

Letting a property without a licence is one of the most common reasons for awards of Rent Repayment Orders (RROs), under which tenants can claim back up to a year's worth of the rent they have paid.

To make matters worse, the RRO window will rise to 24 months' rent from the first of May 2026 under the Renters' Rights Act.

Loss of Eviction Rights 

Under Section 21 and Section 8, a property that requires a licence but does not have one cannot be subject to a Section 21 notice to evict tenants legally.

This is because Section 21 notices are only valid when the property is complying with its legal duties, and having the correct licence is one of those duties

Damaged Reputation

In Chancellor Reeves' case, the agency took the blame for failing to notify their client that she needed a licence. Everyone saw how this agency's reputation was tarnished.

A successful lawsuit or public fine permanently damages an agency's reputation, making it harder to attract new clients or renew contracts. And if the landlords you represent get fined in the process, the client is gone.

Potential Criminal Record

Renting out a property without the right licence is classified as a criminal offence. In some cases, agents may face unlimited fines and even jail time where the unlicensed property is also found to be defying a number of other regulations.

Banning Orders

Worse still, being listed as a 'rogue' agency with serious or repeated offences could result in an order banning you from renting out properties in the future.

These costs are not only for landlords; in most cases, councils hold agents jointly responsible, especially if they applied for the licence on behalf of a landlord. 

Property Compliance & Licensing Automation for UK Property Professionals

The compliance requirements for UK property professionals, letting agents, estate agencies, and property managers are growing every year. Government and local authorities across England, Scotland, and Wales are tightening property legislation, expanding selective licensing schemes, and increasing enforcement action against non-compliant landlords and agencies.

From HMO licensing and selective licensing to right-to-rent checks, EPC requirements, gas safety certificates, and maintenance compliance, the regulatory burden is rising.

Automate Property Compliance with LightWork AI

LightWork AI is property management automation software built for modern property teams. We help letting agents, build-to-rent operators, estate agencies, and portfolio landlords automate property operations and compliance workflows.

Instead of manually tracking licences and certificates in spreadsheets, LightWork AI provides:

• Real-time compliance monitoring
• Automated licence tracking and renewal alerts
• Centralised document management
• Automated maintenance workflow tracking
• Portfolio-wide risk visibility

Your team spends less time on repetitive admin and more time on revenue-generating, high-value work.

Replace Spreadsheets with Real-Time Compliance Monitoring

Spreadsheets can’t keep up with today’s regulatory complexity. Manual tracking leads to missed deadlines, expired licences, and maintenance requests lost in inboxes.

LightWork AI replaces fragmented systems with automated property compliance tracking, ensuring:

• No missed compliance checks
• No expired licences
• No forgotten maintenance issues
• No avoidable regulatory fines

Reduce Risk Across Your Property Portfolio

Whether you manage HMOs, single-lets, multi-unit blocks, or build-to-rent portfolios, LightWork AI helps protect your business from compliance risk.

Don’t let increasing licensing requirements and regulatory pressure slow your growth.

Start automating your property compliance processes with LightWork AI, and let us handle the operational admin while you scale your portfolio with confidence.