Preparing for the Housing Ombudsman’s New Compensation Guidance: What London Landlords Need to Know

What’s Changing and Why It Matters

The Housing Ombudsman has released new compensation guidance effective from 1 April 2026, calling for a 'single vision of fair compensation' across the housing sector. This guidance is designed to standardise how landlords and letting agents handle compensation claims related to service failings. The goal is to ensure compensation is fair, consistent, and focused on restoring tenants to the position they would have been in if no failure had occurred, rather than serving as a punitive fine.

For private landlords, this is a significant development. It signals a move towards greater accountability and transparency in complaint resolution and compensation awards. By adopting these standards, landlords can reduce the risk of complaints escalating to formal Ombudsman investigations and strengthen trust with their tenants.

Practical Implications for Landlords

1. Review and Update Compensation Policies Landlords should audit their current compensation policies and procedures well ahead of the April 2026 deadline. This involves:

• Ensuring policies explicitly reflect the Ombudsman's principles of fairness and consistency.
• Detailing how compensation amounts are calculated to restore tenants rather than punish.
• Including clear timelines for responding to complaints and awarding compensation.

For landlords managing multiple properties or HMOs, standardising these policies across the portfolio is crucial to maintain consistency.

2. Staff Training and Complaint Handling Effective complaint handling is key to resolving disputes early. Landlords and agents should:

• Train all staff involved in complaint management on the new guidance principles.
• Emphasise prompt investigation and fair compensation offers where due.
• Develop scripts or templates to ensure communication with tenants is clear and empathetic.

Single-unit landlords or accidental landlords should consider engaging professional advice or using external complaint handling services to meet these standards.

3. Proactive Engagement with Tenants Early resolution prevents disputes from escalating. Landlords are encouraged to:

• Actively communicate with tenants when issues arise.
• Offer compensation promptly if service failings are identified.
• Keep clear records of complaints, investigations, and compensation decisions.

This approach not only reduces administrative burdens but also fosters goodwill and tenant retention.

4. Monitoring and Benchmarking Compensation Outcomes Landlords should establish monitoring systems to track compensation awards and complaint outcomes. Without specific figures or benchmarks provided by the Ombudsman, local benchmarking can be achieved by:

• Comparing compensation levels with similar landlords or managing agents.
• Reviewing Ombudsman annual reports for example case awards.
• Adjusting compensation policies based on trends and feedback.

Tailoring Actions to Different Landlord Profiles

• Single-unit landlords: Focus on understanding the new guidance, updating your compensation approach, and consider using external resources for complaint handling.
• HMO landlords and portfolio holders: Standardise compensation policies across all properties and train your team to ensure consistent application.
• Accidental landlords: Seek professional advice to navigate the updated compensation landscape and ensure compliance.

Next Steps for Your Landlord Business

1. Schedule a policy review session now to assess your current compensation procedures.
2. Plan staff training on the new guidance well before April 2026.
3. Engage tenants proactively when service failings occur to offer fair compensation early.
4. Set up a monitoring framework to track complaint outcomes and compensation consistency.

How Rentals & Sales Can Support You

At Rentals & Sales, we offer comprehensive portfolio reviews and compliance audits tailored to the new Housing Ombudsman compensation guidance. Our expert team can help you update your policies, train your staff, and develop effective tenant communication strategies. We also provide bespoke pricing advice to reflect the evolving compliance landscape.

Contact us today to ensure your landlord operations are ready for April 2026 and beyond.

Compliance Disclaimer: This article provides general guidance based on current information and does not constitute legal advice. Landlords should consult professional advisors for specific compliance requirements.