The national PRS database costs £65 per property per year. Some local selective licensing schemes charge over £1,000. If Propertymark's case succeeds, landlords paying both will eventually pay only one. That is not a rounding error on a yield calculation.
What Has Happened?
The government confirmed earlier this year that the Private Rented Sector Database, the mandatory national landlord register introduced under the Renters' Rights Act, will open for registrations on 15 December 2026. The rollout starts in the West Midlands. Landlords in that region have until 14 March 2027 to register. From there, the scheme expands across England over the following 12 months, with London landlords facing a deadline of 14 October 2027. The registration fee is £65 per property per year. Landlords register directly; letting agents can assist but cannot register on a landlord's behalf.
This week, Propertymark, the professional body representing estate and letting agents, published a formal position paper arguing that once the national register is operational, the government should abolish all local discretionary licensing schemes. These include selective licensing, which requires all landlords in a designated area to hold a licence, and additional licensing for HMOs beyond the mandatory national threshold of five or more occupants in three or more storeys.
Propertymark's core argument is duplication. The national database will give councils full visibility of every private rented property in England, including its licence status, compliance certificates and landlord details. Once that information is centrally held, Propertymark says a council no longer has a defensible reason to run a parallel local registration system on top of it. The paper also calls for a sunset clause, proposing legislation to prevent any discretionary licensing scheme from being renewed more than twice consecutively, capping the total duration at ten years.
For context: as of October 2026, there are hundreds of active selective and additional licensing schemes across England. Some councils run multiple overlapping schemes covering large parts of their area. Liverpool operates 39 separate licensing designations across the city. Westminster, Camden and Newham all have active additional HMO licensing schemes that run independently of mandatory licensing.
Why This Matters to UK Property Investors
The cost case is direct. A landlord with a standard buy-to-let in a selective licensing area currently pays the local fee, which ranges from roughly £400 in some councils to over £1,000 in others, for a term of typically five years. From December 2026, that same landlord will also pay £65 per year to register the property on the national database. Over a five-year local licensing term, the combined cost runs to £725 in the best case and over £1,325 in higher-fee areas, with no operational difference in outcome from either scheme's perspective.
For HMO investors the position is sharper. An HMO operator in Westminster under additional licensing, for example, pays a licence fee that can approach £2,000 for a five-bedroom property, plus the national database fee on top. The operational compliance requirements of the local licence, gas safety, electrical checks, fire safety, tenant information, management standards, largely overlap with the compliance requirements under the national register. Propertymark's point is that investors are paying twice to demonstrate the same compliance.
There is a secondary effect on acquisition prices. In markets with heavy licensing coverage, some smaller landlords have been selling rather than renewing licences as compliance costs have accumulated alongside the Renters' Rights Act obligations. That selloff shows up in Rushbrook's September 2026 data, which counted 1,322 portfolios listed for sale across England at a combined value of £1.4 billion, concentrated in the heavily regulated metropolitan markets. If local licensing was abolished or significantly reduced, the cost pressure on those landlords would fall and some of the forced sales pressure would ease. That affects deal flow and acquisition pricing in those markets.
For yield calculations: any investor modelling gross yield in a licensing area today needs to factor in the full annual compliance cost, including both national registration and the local licence pro-rated over the scheme's term. Many published yield figures do not do this. A property in Liverpool generating 6.8% gross yield before licensing costs is producing something closer to 6.2% or 6.3% after costs, depending on the specific fee. That is the number that matters, and it changes the comparison with unlicensed markets.
The Risks Investors Need to Understand
Propertymark's paper is a lobbying document, not government policy. Local authorities have independent statutory power to introduce and renew licensing schemes under the Housing Act 2004. They do not need central government approval for most selective and additional licensing applications covering fewer than 20% of properties in an area; schemes covering more than 20% require Secretary of State sign-off. Even if the government agreed with Propertymark's position in full, removing local licensing powers would require primary legislation or at minimum a significant change to MHCLG guidance.
There is also a financial incentive problem. Local licensing fees fund local enforcement teams. A busy London borough running three or four licensing schemes generates hundreds of thousands of pounds in annual fee income, which pays for the officers enforcing standards in those properties. Abolishing schemes means councils have to find that funding from somewhere else, at a time when local authority budgets are already under severe pressure. That is not a trivial obstacle.
The October 2026 picture is that councils are not slowing down on licensing despite the approaching national register. Knowsley approved planning restrictions requiring permission before a family home becomes a small HMO in mid-October, adding an Article 4 Direction that operates separately from licensing. Burnley is consulting on a fresh Article 4 covering the whole borough, on top of its existing selective licensing work. Cardiff launched a consultation on renewing its additional HMO licensing scheme for another five years. None of those councils appear to be waiting for Propertymark's argument to resolve itself.
The sunset clause proposal, even if legislated, would not end existing schemes immediately. An existing scheme in its first five-year term could run to 2028 or 2029, renew once (taking it to 2033 or 2034), and only then be blocked from a third renewal. That is a long runway by any investor's planning horizon. The double-licensing cost is a reality for at least the medium term in most affected markets, and anyone buying in those areas should price it accordingly rather than waiting for a political resolution that may be years away.
Where the Opportunity Could Be
The immediate tactical point is relatively straightforward: investors who model the full compliance cost stack in licensing areas and price deals accordingly are working with accurate numbers. Some of the deals that look tight on gross yield in Liverpool or Westminster are tight because the licensing costs have not been properly accounted for. Others are genuinely good deals that happen to carry visible regulatory overhead. Telling the difference requires doing the arithmetic, not ignoring it.
There is also a case for looking at markets that have not yet adopted selective or additional licensing, particularly in parts of the East Midlands and South Yorkshire where gross yields already sit above 7%. An investor buying in Sheffield S3 or Nottingham NG7 into areas without current local licensing is paying £65 per year per property on the national register from December, nothing else. That structure is materially cleaner than the same investment in a Westminster or Liverpool licensing zone.
If Propertymark's position does gain political traction over the next two or three years, the landlords best placed to benefit are those already invested in licensing areas and continuing to hold. The regulatory cost falls and the asset's net yield rises without any change to the property or the rent. That is a reasonable secondary consideration for anyone looking at licensing-area deals at current prices, provided the numbers work now without betting on the policy change.
Finally, some councils have historically been slower to renew lapsed schemes than to introduce new ones. Brighton's selective licensing scheme was paused this year following a legal challenge. The NRLA's successful challenge against Telford in September 2026 established useful precedent on the quality of council evidence required to justify a designation. Investors in areas with upcoming scheme renewals, particularly five-year schemes that started in 2021 or 2022 and are approaching renewal in 2026 or 2027, should watch the renewal consultation closely. A renewal that fails the evidence test is a real possibility in the current legal climate.
Arsh's Investor View
Propertymark is right in principle. Once every landlord in England has to register nationally, the justification for a parallel local register becomes much weaker. The argument was always that local licensing filled the visibility gap. Once that gap is closed centrally, the argument falls away. I agree with the direction of what Propertymark is proposing.
What I am less convinced by is the timeline. Councils are not going to give up licensing fee income voluntarily, and the political path to removing their powers involves navigating both MHCLG and the Local Government Association, neither of which moves fast. The double-licensing period is going to run for years, not months. Any investor who models their numbers without both costs is working from an optimistic assumption.
My practical read: buy in licensing areas only if the yield calculation works with full licensing costs included. If Propertymark's argument eventually succeeds and local schemes disappear, that is a bonus, not a prerequisite. The HMO markets in areas like Sunderland, Bradford and parts of Birmingham already deliver 8% to 9% gross where licensing costs, local and now national, still leave a positive cashflow at current mortgage rates. That is where I'd be looking, not hoping that London's licensing overhead falls away in the next couple of years.
One thing I think is genuinely useful in Propertymark's paper is the sunset clause proposal. Even if wholesale abolition fails, a cap at two consecutive five-year terms gives investors a finite planning horizon. Right now there is no limit on how long a licensing scheme can run or how many times it can be renewed. A sunset clause changes that calculation and makes the regulatory overhead more manageable in the long term.
How Property Investor App Can Help
Property Investor App includes buy-to-let deals from across England, including properties in both licensed and unlicensed areas, so investors can compare the full cost stack before committing to a deal. For investors specifically looking at HMO opportunities in markets where licensing costs are a key variable, PIA's search tools allow filtering by region and property type, covering the high-yield northern and Midlands markets alongside the more regulated metropolitan areas. Connecting directly with sellers and sourcers through PIA's network also gives access to off-market deals where the compliance history and licensing status can be verified before offer. Browse UK property investment opportunities on Property Investor App.
Key Takeaways
- The national PRS landlord database opens for registrations on 15 December 2026, starting in the West Midlands. West Midlands landlords must register by 14 March 2027. The fee is £65 per property per year. All English landlords will be required to register within 12 months of launch.
- Propertymark has published a formal position calling for all local selective and additional licensing schemes in England to be scrapped once the national register is operational. The argument is that central registration removes the justification for parallel local schemes.
- Local licensing fees currently range from around £400 to over £1,000 per property per term in actively licensed areas. From December 2026, landlords in those areas will pay both the national database fee and the local licence fee, with no reduction in compliance obligations under either scheme.
- Councils are under no obligation to act on Propertymark's position. Several are actively introducing new controls in October 2026: Knowsley approved an Article 4 Direction restricting small HMO conversions, Burnley is consulting on a borough-wide Article 4, and Cardiff is proposing to renew its additional HMO licensing scheme for five years.
- Propertymark's proposed sunset clause would prevent any licensing scheme from being renewed more than twice consecutively, capping each at ten years total. Even if legislated, existing schemes could continue until 2033 or 2034 before hitting the cap.
- Investors in locally licensed areas should model yield with both costs included: national registration at £65 per year and the local licence pro-rated over its term. A 6.8% gross yield in a Liverpool licensing zone is closer to 6.2% to 6.3% net of full compliance costs.
Frequently Asked Questions
What is the national PRS database and when does it launch?
The Private Rented Sector Database is the mandatory national landlord register introduced under the Renters' Rights Act. It opens for registrations on 15 December 2026, starting in the West Midlands. West Midlands landlords have until 14 March 2027 to register their properties. The scheme then expands across England over the following 12 months, with London landlords facing a deadline of 14 October 2027. The fee is £65 per property per year, paid by the landlord. Agents can help landlords prepare registration information but cannot register on a landlord's behalf.
Will local selective licensing be scrapped when the national landlord register launches?
Not automatically, and probably not immediately. Propertymark has called for local discretionary licensing to be abolished once the national register is operational, but local authorities have independent statutory power to run licensing schemes under the Housing Act 2004. Abolishing those powers would require primary legislation or a significant change in government guidance. As of October 2026, several councils are introducing new licensing designations or extending existing ones, which suggests most are not expecting the national register to replace their schemes any time soon.
How much does local licensing cost compared to the national PRS database?
Local selective licensing fees vary by council but typically range from around £400 to over £1,000 per property for a five-year term. Some additional HMO licensing fees for larger properties in metropolitan councils run higher still. The national PRS database fee is £65 per property per year, which amounts to £325 over a five-year period. A landlord in an active licensing area will pay both fees from December 2026, with no reduction in either as a result of the other running in parallel.
What is Propertymark's sunset clause proposal for local licensing?
Propertymark is calling for legislation to be amended to prevent any local discretionary licensing scheme from being renewed more than twice consecutively. Each scheme runs for a maximum of five years, so the proposed cap would allow a maximum of two consecutive five-year terms, a total of ten years, before the scheme must be wound up. This would not affect currently active schemes immediately but would limit how long councils can keep renewing them. Existing schemes started in 2022 or 2023, for example, could still run until 2032 or 2033 under the proposed cap.
Should I factor local licensing costs into my BTL yield calculation?
Yes. Published gross yield figures for properties in licensing areas rarely include the licensing cost as a deduction. For an accurate net yield calculation, take the annual local licence fee pro-rated over the term, add the £65 national database fee from December 2026, and subtract both from the annual net rental income before calculating yield. On a property generating £9,000 per year in rent, a combined annual licensing cost of £225 (local licence at £800 over five years plus £65 national) reduces net annual income by roughly 2.5%, pushing a 6.8% headline yield to around 6.6%. The difference is not dramatic on a single property, but across a portfolio of ten properties in licensed areas it adds up to over £2,000 per year in additional costs not visible in headline yield data.
