Letting agents warn over rising Renters’ Rights Act enforcement powers

Letting agents warn over rising Renters’ Rights Act enforcement powers

Letting agents and landlords face increased financial penalties and regulatory complexity under the Renters’ Rights Act 2025, with local licensing schemes expanding and a new Private Rented Sector Database due to launch in late 2026.

Propertymark, the trade body for letting agents, has urged members and landlords to familiarise themselves with the growing local licensing requirements and the heightened penalties introduced by the Renters’ Rights Act. The Act raised the maximum civil financial penalty for offences related to unlicensed properties from £30,000 to £40,000, increasing the risks for those managing Houses in Multiple Occupation (HMOs) or other rented properties without the necessary licences.

Alongside these changes, councils across England are consulting on new selective and additional licensing schemes, including the use of Article 4 Directions to control HMOs. Propertymark highlights the importance of understanding licensing obligations, especially as liability can extend beyond landlords to those managing properties or involved in rent-to-rent arrangements. Non-compliance may also lead to rent repayment orders, with tenants or councils able to reclaim up to two years’ rent.

Rising penalties and expanding local licensing schemes

The Renters’ Rights Act 2025 represents a significant step in tightening regulation of the private rented sector. By increasing the maximum civil penalties for Housing Act offences, the government has signalled a tougher stance on unlicensed and poorly managed rental properties. Propertymark’s Tim Thomas emphasises that the cost of non-compliance is rising, making it vital for landlords and agents to clearly understand which properties require licences and the conditions attached.

Local authorities are actively reviewing and expanding licensing schemes, with consultations ongoing in places such as Ealing, Preston, Burnley and the Royal Borough of Greenwich. Proposed licensing fees vary widely, with some councils suggesting charges exceeding £1,000 per property. Additional HMO licensing and Article 4 Directions are also under consideration, which could further restrict certain property uses and add to compliance burdens.

The introduction of the Private Rented Sector Database, planned for regional rollout from late 2026, will require landlords to register their properties and pay an annual fee. This national register aims to improve oversight and enforcement but also raises concerns about duplicated administrative demands if local and national systems are not well coordinated.

Complexity and coordination challenges in regulation

Propertymark calls for better coordination between national and local regulation to avoid unnecessary duplication and administrative overload. The organisation supports a national PRS Database but stresses that landlords and agents should not have to repeatedly submit the same information to different authorities. A streamlined approach would help councils identify non-compliance more efficiently and support responsible landlords in demonstrating their adherence to licensing requirements.

The current regulatory environment is becoming increasingly complex, with overlapping local licensing schemes, rising penalties, and new national registration obligations. This complexity poses challenges for landlords and letting agents, particularly those with smaller portfolios who may lack dedicated compliance resources.

Propertymark encourages its members to engage actively with local licensing consultations to provide evidence on the costs and impacts of new schemes. This feedback is crucial to ensure that regulation is proportionate, evidence-based and focused on improving housing standards rather than merely increasing burdens.

Practical implications for landlords and letting agents

For landlords and agents, the expanded enforcement powers and licensing requirements mean a greater need for vigilance and due diligence. Ensuring that all properties have the correct licences in place and comply with licence conditions is essential to avoid costly penalties and rent repayment orders.

Those involved in managing or controlling properties, including rent-to-rent operators, should review their responsibilities carefully. Liability for unlicensed properties can extend beyond the immediate landlord, so clear contractual arrangements and compliance checks are advisable.

The forthcoming PRS Database will introduce a new compliance obligation, requiring registration and payment of an annual fee. Landlords and agents should prepare for this by gathering accurate property information and monitoring official guidance on the database’s implementation.

What remains uncertain about enforcement and licensing

Details about the PRS Database’s rollout and operational requirements remain limited, with regional implementation expected to begin late in 2026. The extent to which local licensing schemes will be harmonised with the national register is unclear, raising concerns about potential duplication and administrative complexity.

It is also uncertain how councils will enforce the higher penalties and whether there will be increased resources for monitoring compliance. The impact of expanded licensing fees on rental supply and affordability is a further area of concern, with some councils proposing fees that could significantly increase landlords’ costs.

Landlords and agents should watch for updates from local authorities on licensing consultations and from government on the PRS Database. Staying informed will be key to managing compliance risks effectively.

Steps landlords and agents should take now

• Review all properties to confirm whether a licence is required under current local schemes.
• Check that any licences held are valid and that all conditions are being met.
• Engage with local authority consultations on licensing proposals to provide feedback on potential impacts.
• Prepare for the PRS Database by compiling accurate property data and monitoring official guidance on registration and fees.
• Clarify responsibilities within rent-to-rent or management arrangements to ensure compliance liability is understood.
• Keep detailed records of licence applications, renewals, and communications with local authorities.

Keeping rental portfolios compliant amid evolving regulation

Membership of The Landlord Association (TLA) offers landlords and letting agents access to practical compliance resources and support tailored to the evolving regulatory environment. TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, is designed to help members organise property records, manage licensing documentation, and maintain evidence of compliance activity.

ORBIT’s features relevant to licensing include tools for tracking licence expiry dates, recording communications with local authorities, and storing key documents securely. This can simplify the administrative burden posed by expanding local licensing schemes and the forthcoming PRS Database. TLA members can also access up-to-date guidance on regulatory changes and participate in consultations through the association’s network.

Exploring TLA membership and ORBIT BETA access can support landlords and agents in meeting their obligations under the Renters’ Rights Act and related licensing requirements, helping to reduce the risk of costly penalties and enforcement action.

Landlords should continue to monitor developments closely and seek professional advice where necessary to ensure compliance with the increasingly complex regulatory framework.

Sources: Landlord Today