Letting agents and landlords now face penalties of up to £40,000 for licensing breaches as councils expand regulation across the private rented sector.
Propertymark is urging agents to check local requirements as councils introduce or consult on selective and additional licensing schemes.
The first phase of the Renters’ Rights Act took effect on 1 May 2026.
The legislation increased the maximum civil financial penalty for relevant Housing Act offences from £30,000 to £40,000.
Councils can impose the higher penalty for offences such as operating an HMO or other property without the required licence. Breaching licence conditions can also trigger penalties.
Meanwhile, councils across England are considering new or expanded licensing schemes. Some councils are also considering Article 4 Directions affecting HMOs.
Propertymark says local regulation and higher penalties have made compliance increasingly complex.
Agents warned over licensing responsibilities
Operating an unlicensed property can carry consequences beyond civil penalties.
Depending on the circumstances, those managing or controlling a property can face liability. Landlords further up a rent-to-rent chain may also carry responsibility.
Councils and tenants can also seek rent repayment orders where landlords fail to obtain a required licence.
In relevant cases, they can seek repayment of up to two years’ rent.
Tim Thomas, senior policy and campaigns officer at Propertymark, said: “The regulatory landscape for the private rented sector is becoming increasingly complex, and the cost of getting compliance wrong is rising. Agents and landlords need to be absolutely clear about whether a property requires a licence, what conditions apply and who carries responsibility within the ownership and management structure.
“Licensing can play a role in tackling poor standards and helping councils identify properties that require intervention, but schemes must be evidence-led, proportionate and properly enforced. Responsible landlords and professional agents should not be faced with unnecessary duplication, excessive administration or a patchwork of requirements that makes it harder to provide much-needed homes.”
PRS Database adds another layer
The government also plans to introduce the Private Rented Sector Database.
It intends to begin a regional rollout from late 2026. Landlords will have to register and pay an annual fee.
Propertymark supports a national register. However, it wants greater coordination between national and local regulation.
Thomas said: “With the PRS Database coming forward, now is the time for central government and local authorities to work together to make regulation simpler rather than adding another layer of bureaucracy. A national system should help councils identify non-compliance and support responsible landlords to demonstrate that they are meeting their obligations, not require the same information to be submitted again and again.”
More councils consider licensing changes
Propertymark points to Ealing, Preston, Burnley and the Royal Borough of Greenwich among councils considering licensing changes.
Proposed fees range from hundreds of pounds to more than £1,000 per property.
The trade body wants councils to set clear objectives for licensing schemes and support them with local evidence. It also wants councils to make fees and enforcement policies transparent.
Thomas added: “We are encouraging our members to engage with local consultations and tell us where new licensing schemes are creating additional costs, administrative burdens or risks to rental supply. This evidence is vital in ensuring regulation delivers better housing outcomes rather than simply increasing the regulatory burden.”
