Compliance drives majority of landlords to change management arrangements

Compliance drives majority of landlords to change management arrangements

A recent survey reveals that compliance concerns have become the leading reason for landlords in the UK to alter their property management approach, with 65% having changed arrangements in the last two years.

According to the August 2026 Landlord Survey by August, compliance and legal complexity now top the list of reasons landlords switch how they manage their properties. The survey found that 65% of landlords have changed their management arrangements within the past two years. This includes 27% who left letting agents to self-manage, 26% who engaged letting agents, and 12% who switched agents. Compliance issues accounted for 27% of these changes, surpassing other factors such as desire for more control (22%), poor service (20%), and fees (14%).

The survey also highlights that management fees remain substantial, with 58% of landlords paying 11% or more of the rent as fees, and nearly 10% paying above 15%. For example, on a portfolio of five properties each letting at £1,000 per month, a 12% fee equates to £7,200 annually. Despite these costs, there is a strong trend towards self-management, with 69% of landlords expecting to self-manage all their properties within two years, including 58% of those currently using agents.

Survey findings on compliance burden and time investment

The survey attributes the increasing compliance burden to new regulations such as the Renters’ Rights Act and Making Tax Digital (MTD). The MTD second deadline recently passed, and landlords subject to MTD anticipate significant additional time commitments. Three-quarters (75%) of landlords in scope expect to spend at least four extra hours per quarter on MTD-related tasks, with 41% estimating between four and eight hours, and 34% expecting more than a full day. Only 6% believe it will take less than an hour.

When annualised, this means most landlords will spend between 16 and 32 hours a year on MTD compliance, with a third exceeding 32 hours annually. Other compliance-related concerns include void periods and mortgage rates (both cited by 19% of landlords), and tax issues (13%). Only 2% of respondents reported having no particular worries about compliance.

Richard Samuel, chief executive of August, commented on the cumulative effect of regulatory obligations: “Government has been adding obligations to landlords for a decade without anyone adding up the hours. Quarterly digital tax reporting is the first one that landlords can put a number on, and it is days, not minutes. Add the new database, the ombudsman, periodic tenancies and the paperwork around every rent increase, and the small landlord is now running a compliance function with no staff. Some will pay an agent, some will leave, and the rest need tools that do most of this for them. That is what the next few years of the sector look like.”

Context of rising compliance demands in the rental sector

Landlords and letting agents have faced an increasingly complex regulatory environment over recent years. The Renters’ Rights Act introduced new tenant protections and procedural requirements, while Making Tax Digital imposes quarterly digital reporting obligations that many landlords find time-consuming. These changes come alongside other compliance duties such as mandatory licensing in some areas, safety regulations including electrical and gas checks, and deposit protection rules.

The survey’s findings reflect a sector grappling with these demands and seeking to adapt management strategies accordingly. The shift towards self-management suggests landlords are aiming to regain control and reduce costs, but also face the challenge of handling compliance themselves. For letting agents, this trend signals a need to demonstrate value beyond basic management, particularly by offering compliance expertise and digital tools to ease landlords’ burdens.

Practical implications for landlords and agents

For landlords, the survey underscores the importance of staying current with regulatory changes and understanding the time commitment compliance entails. Self-managing landlords must be prepared to invest significant effort into tax reporting and legal obligations, or consider outsourcing to agents with proven compliance capabilities. The high fees charged by agents may be balanced against the risk and workload of non-compliance.

Letting agents face pressure to justify their fees and service quality, especially as many landlords contemplate switching or self-management. Agents who can provide clear compliance support, efficient digital reporting, and transparent fee structures may retain or attract clients. The survey suggests that compliance complexity is a critical factor influencing landlords’ decisions, so agents should prioritise compliance services and communication.

Uncertainties and areas to monitor

While the survey highlights current trends, the rental sector continues to evolve. The full impact of recent legislation such as the Renters’ Rights Act is still unfolding, and further regulatory changes may be introduced. The practical implementation of Making Tax Digital for landlords is also developing, with potential for adjustments to ease burdens or clarify requirements.

Landlords and agents should monitor official guidance closely and be alert to updates from government departments and regulatory bodies. The capacity of digital tools to reduce compliance time remains a key question, as does how the market will respond to ongoing fee pressures and management model shifts. The balance between self-management and professional agency services may continue to fluctuate based on these factors.

What landlords should consider now

Landlords should review their current management arrangements in light of compliance demands and the time required for tax and legal obligations. Assessing whether self-management is feasible or whether professional support is needed is essential. Those considering agents should evaluate the compliance expertise and fee structures offered, while self-managers must ensure they have systems to handle digital reporting and regulatory tasks effectively.

Maintaining thorough records, staying informed about legislation, and planning for the administrative workload are practical steps. Landlords may also benefit from exploring tools and resources designed to streamline compliance. Regularly reviewing property management strategies will help landlords adapt to the evolving regulatory environment and avoid costly mistakes.

Supporting landlords with compliance through TLA membership

The Landlord Association (TLA) offers members access to a range of compliance resources and tools to help manage the increasing regulatory workload highlighted by the survey. TLA membership provides practical information on tenancy agreements, notices, and safety obligations, as well as document templates through the AI Document Studio. Members can also benefit from the Portfolio Health Check to monitor certificates, deadlines, deposits, and licensing requirements.

TLA is developing ORBIT, a new property management and compliance platform currently in BETA testing. ORBIT aims to assist landlords and letting agents in organising properties and portfolios, managing rental documents and records, and accessing compliance resources. It includes features to record repairs, inspections, communications, and key actions, helping members keep property management and compliance information together in one place.

By exploring TLA membership and ORBIT BETA access, landlords can better prepare for ongoing compliance challenges and reduce the administrative burden. Staying organised and informed is increasingly important as regulatory complexity grows.

Looking ahead, landlords and agents will need to remain vigilant about compliance obligations and consider how best to manage the associated time and costs. The trend towards self-management may continue, but professional support focused on compliance expertise will remain valuable for many.

Sources: Letting Agent Today