After Rachel Reeves’ rental licence misstep, here’s what ALL landlords need to know

Chancellor Rachel Reeves admitted this week she let out her London home without the required licence.

On Wednesday, the Daily Mail revealed the Chancellor failed to obtain a selective licence when she placed her family home in Dulwich, south London, on the rental market last year as they moved into No 11 Downing Street.

Subsequent email correspondence between the Chancellor’s husband and their letting agent showed the firm had offered to apply for one, but had then failed to do so.

By failing to comply with licensing requirements Reeves could face a significant fine from the council of up to £30,000. 

Her tenants could also claim back up to 12 months of the rent they have paid during the time the property has been without a licence.

This is what landlords need to know to avoid making the same mistake as the Chancellor and her letting agent.  

Rachel Reeves (pictured on Thursday) admitted this week she let out her London home without the required licence

What are selective licenses and what do they cost? 

There are more than 180 laws and 400 regulations for landlords to comply with, according to the letting agent Leaders.

These rules can vary widely depending on what council area the home is in, and sometimes even which ward. 

In Reeves’ case, the £945 selective property licence is required by Southwark Council for all privately rented homes that fall within certain areas of the borough, and aren’t covered by a separate licensing scheme. 

The licences are usually granted for five years. They require landlords to meet certain management and maintenance standards and undergo regular property checks.

Landlords failing to comply can incur significant penalties. At worst, they could face prosecution or to pay back rent to their tenants – something Rachel Reeves may now be at risk of. 

A Freedom of Information Request by Direct Line Group last year showed the majority of councils in England don’t have such schemes in place.

Out of 317 councils, 245 responded to Direct Line’s request, with 47 confirming they currently have selective licensing schemes.

Landlords in areas that require a licence are being charged £700 on average to get one, the insurer said. 

Reeves’ mistake highlights just how complex the rental landscape has become, with more than 180 laws and 400 regulations to comply with

Allison Thompson, national lettings managing director at Leaders says: ‘Compliance isn’t just about avoiding fines – it’s about maintaining trust and ensuring tenants live in safe, well-managed homes. 

‘Our advice is to check your property licences, keep your safety certificates current, and review your documentation regularly. 

‘The cost of getting it wrong is far greater than the effort it takes to get it right – knowledge isn’t optional anymore, it’s risk management.’

What other licences might landlords need?

Selective licensing isn’t required if a property is covered by another license, such as one for homes in multiple occupation (HMOs). 

An HMO is when a property has at least three tenants living there forming more than one household and if the toilet, bathroom or kitchen facilities are shared.

The general rule is that a HMO must have a licence if it is occupied by five or more people. However, many individual councils require one if there are three or four tenants.

HMO licences typically cost more than selective licences and require landlords to conform to additional regulations, fire safety measures and minimum room sizes.

‘Check your local licensing requirements,’ says letting agent Thompson. ‘Confirm whether the property requires a mandatory, additional or selective licence from the local authority.’ 

Get consent to let 

Homeowners also need permission from their insurer and mortgage lender before they can rent a property out.  

They will need to inform their home insurance provider, otherwise they may invalidate their policy.

If they own a leasehold property, they will need to notify the freeholder or management company as most leases say leaseholders must get permission to sublet.

A consent to let from a mortgage lender is also needed for anyone with a home loan. 

Many lenders charge a small administration fee to do so, although some may increase the overall interest rate payable.

For example, Santander allows property letting subject to a £295 fee. 

Unauthorised letting could violate the owner’s mortgage terms, leading to serious consequences.

Does your property comply with eco rules?  

Landlords need to ensure their property has a minimum energy performance certificate rating of E in order to let it, unless they are exempt because they own a period property. 

The EPC is a rating scheme which bands properties between A and G, with an A rating being the most energy efficient and G the least efficient.

It is estimated that 2.6 million privately rented homes are EPC D or below, according to the Ministry of Housing, Communities and Local Government. That equates to 60 per cent of rented homes. 

EPC  certificates are valid for 10 years and all landlords must provide a copy to tenants before they move in.

Failure to do so can lead to large fines and stop a landlord from being able to let their property in future. 

It will also prevent a landlord from being able to successfully serve a section 21 no fault eviction notice – though this won’t matter once the Renters’ Rights Act comes into effect and bans this form of eviction.

Eco rules: At present, landlords need to ensure their property has a minimum EPC rating of E

Check the electrics are safe

All new tenancies have required a valid Electrical Installation Condition Report (EICR) since July 2020.

The EICR is designed to check the electrical components in a home are working properly and detect any faulty sockets or old wiring that might cause an electrical fire.

The inspection needs to be carried out by a registered electrician and costs between £100 and £300 depending on the size of the property a new inspection will be required every five years. 

If a landlord fails to do this, local authorities will be able to fine them up to £5,000 for a first offence and up to £30,000 thereafter.

Test gas safety – or risk prison

Landlords need to have a gas safety inspection carried out every year, if the home uses gas. 

They must install smoke alarms on every floor and put carbon monoxide detectors where there is a fuel burning device such as a wood burner or coal fire.

If a property is missing a gas safety certificate, they can be fined up to £6,000 per appliance or even receive a six month prison term.

If a tenant dies as a result, the landlord can be prosecuted for manslaughter. 

Protect the tenant’s deposit

Landlords must register deposits in a government-approved scheme within 30 days.

If they don’t, the tenants can take them to court to get their deposit back, as well as claiming compensation of up to three times the deposit amount. 

The court fee is £377 for a tenant, but the tenant can claim this back from their landlord if they win their case. 

Maintain and repair the property

Under Section 11 of the Landlord and Tenant Act 1985, landlords are legally responsible for the property’s structure, exterior, plumbing, heating and sanitation.

However, as a result of the new Renters Rights Act, landlords will also now be held to higher standards over the homes they let out.

This is because the Decent Homes Standard will now be applied to the private rented sector. 

This sets minimum requirements that homes must meet and applies Awaab’s Law – which sets strict timeframes for repairing dangerous hazards like damp and mould – to privately rented homes. These standards are already enforceable in social housing.

Local authorities will enforce these new rules and will be able to hand out fines and other civil penalties.

‘Whilst some of the new requirements for landlords could theoretically result in criminal prosecution for breaches of them, local authorities are to be granted wide powers to impose significant fines for non-compliance,’ says Patrick Ansell, property litigation expert at Taylor Rose Law Firm.

‘Landlords will also be at risk of Rent Repayment Orders being applied for by tenants or local authorities in many circumstances.’

Higher standards: The new law will apply the Decent Homes Standard to the private rented sector which is intended to give renters safer, better value homes

Follow the rules if you evict tenants 

Under the new Renters’ Rights Act, landlords will very soon no longer be able to carry out so-called ‘no-fault’ evictions – meaning they cannot get rid of tenants without a good reason. 

It is expected to take effect within the next six months. 

Landlords should still be able to recover their property in some circumstances such as in order to sell the property or if they or family members are moving into it. 

But they will not be allowed to evict under these grounds within the first year of a tenancy, and after that will need to give tenants four months’ notice. 

If a landlords asks tenants to leave because they want to sell the home, they will be banned from putting it back on the lettings market for 12 months. 

A scandal erupted in August when Labour MP Rushanara Ali was accused by her tenants of evicting them to sell the property, only to re-list it and hike up the rent. 

Evictions will now be carried out under a process called a Section 8 notice. 

‘The Renter’s Rights Bill will end Section 21 evictions for both new and existing tenancies, meaning landlords will no longer be able to evict a tenant without reason,’ says Patrick Ansell.

‘Landlords will still be able to evict tenants if they have a statutory ground for doing so, such as if the landlord intends to sell the property, the tenant is in rent arrears or commits anti-social behaviour, but they will only be able to do so using the amended Section 8 process.’

Stricter eviction rules: Section 21 ‘no fault’ evictions will soon be scrapped, meaning landlords will no longer be able to evict tenants without giving a valid reason

Pay tax on the money you take in rent 

Landlords need to file a self-assessment tax return each year, or hire an accountant to do it for them. They will need to declare the rental income as well as any costs and fees.

From 6 April 2026, those earning over £50,000 from self-employment or renting out property will need to start making quarterly submissions to the taxman, instead of annual ones. 

Those earning between £30,000 and £50,000 will follow in April 2027, with further expansion to those earning £20,000 or more from 2028. 

This is part of His Majesty’s Revenue & Custom’s shift towards digital record-keeping for income tax.

The move is expected to affect approximately 780,000 people in its first wave, with another 970,000 to follow from April 2027, then further expansion in 2028.

Prepare to be on a landlord database

Thanks to the Renters’ Rights Act, there will also soon be a national private rented sector database that will require every landlord in England to register and list details of every property they let.

The aim is to give local authorities and tenants a single source of information about who owns and manages each rental property. 

Landlords who fail to register will be unable to legally let their properties and face fines for not doing so.

They could even be subject to a landlord ombudsman, which will handle complaints from tenants and could force them to pay compensation. 

Conduct Right to Rent checks

Landlords must verify and record the immigration status of all adult occupiers in their properties.

Letting agents will often conduct these checks on a landlord’s behalf, but where this does not happen a landlord can face penalties of up to £20,000 per tenant or even a criminal charge or prison sentence. 

Provide correct documentation

Landlords must also provide their tenants with the Government’s ‘How to Rent’ guide.

Not doing so could prevent a landlord from successfully evicting a tenant.

Sanctions checks

From May this year, letting agents have to carry out sanctions checks to ensure neither the landlord nor the tenant is on a government or international list of sanctioned individuals or entities involved in activities like money laundering, terrorism, or human rights violations.

‘These measures were brought in six months ago to ensure tenants aren’t on the UK’s financial sanctions list, but it’s taking landlords and letting agents time to catch up,’ says Kerry Aldrige, head of compliance at lettings tech platform, Goodlord.

‘In fact, our research shows that almost 30 per cent of large agencies across the country are still not conducting these checks on behalf of their landlords – putting them at risk of fines of up to £20,000.’

Get to grips with the rest of Renters Rights Act

The just passed Renters’ Rights Act has added an entirely new layer of regulation for landlords and their letting agents to grapple with.

This inclues converting all fixed term tenancies to rolling periodic tenancies, the end of no fault evictions, limiting of rent increases, the banning of bidding wars, and upfront payments by tenants. You can find out more about the Renters Rights Act and when it might come into effect here.

Kerry Aldrige of Goodlord says: ‘As a result of the Act, Agents and landlords now need to ensure that every single tenancy contract they hold has been updated to make it a periodic tenancy rather than fixed-term.

‘And landlords can now only raise rents once a year and only by issuing a ‘Section 13’ notice. 

‘If this isn’t done in the right way – such as giving tenants two months notice of any rent rises) – or tenants don’t believe the rent increase is reasonable, landlords can be taken to tribunal and tenants can refuse to pay the increased rental amount until the case is settled. 

‘This could leave landlords out of pocket in the interim, as well as facing lengthy tribunal proceedings.’