Under the Housing Act 2004, where a licence is required and a local authority issue a licence, they may impose conditions on the licence holder under section 67 Housing Act 2004:
(1) A licence may include such conditions as the local housing authority consider appropriate for regulating all or any of the following—
(a) the management, use and occupation of the house concerned, and
(b) its condition and contents.
(2) Those conditions may, in particular, include (so far as appropriate in the circumstances)—
(a) conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it;
(b) conditions requiring the taking of reasonable and practicable steps to prevent or reduce anti-social behaviour by persons occupying or visiting the house;
(c) conditions requiring facilities and equipment to be made available in the house for the purpose of meeting standards prescribed under section 65;
(d) conditions requiring such facilities and equipment to be kept in repair and proper working order;
(e) conditions requiring, in the case of any works needed in order for any such facilities or equipment to be made available or to meet any such standards, that the works are carried out within such period or periods as may be specified in, or determined under, the licence;
(f) conditions requiring the licence holder or the manager of the house to attend training courses in relation to any applicable code of practice approved under section 233.
There are also a number of mandatory conditions which must be included but aren’t relevant at this time.
In the recent case Nottingham City Council v Parr & Anor  UKSC 51, the Supreme Court had to decide whether conditions imposing a particular class of person only being allowed to occupy a building was lawful.
At previous hearings, the First-tier Tribunal and Court of Appeal had attached conditions to a licence which would require the building only to be occupied by students. This gave flexibility in the size of the rooms being let (a point which is less important now because minimum room sizes have been introduced in England).
Nottingham City Council disagreed with the conditions limiting the building to only be occupied by students and so appealed to the Supreme Court.
The Supreme Court agreed with the earlier decisions (except to delete the requirement of occupation for only ten months in each year) and dismissed the appeal made by Nottingham.
It was held that it is acceptable in certain circumstances for a local authority to impose a condition that a building only be occupied by a certain class of person(s) including only to be occupied by students.