The Renters' Rights Bill proposes a new Private Rented Sector Ombudsman. While joining will be compulsory for landlords, agents also need to stay vigilant.
Originally published: April 2024
First proposed in the now-shelved Renters (Reform) Bill, the Labour Government is moving forward with plans to establish a new national landlord ombudsman.
It’s a key part of the Renters’ Rights Bill, which represents their commitment to raising the bar for tenants and cracking down on rogue landlords.
Once in force, all private landlords, regardless of whether they manage properties themselves or through an agent, will be legally required to register with the Private Rented Sector Ombudsman scheme.
Those who fail to join may face penalties of up to £7,000 for initial breaches, rising to £40,000 or even criminal prosecution for continued breaches.
But it isn’t just landlords who’ll be in hot water.
While agents don’t have to join the Ombudsman, you’re subject to the same fines if you fail to ensure your clients are registered.
That’s why you must understand:
- How the Ombudsman will work
- All the implications for your business and clients
In this blog, I’ll cover everything you need to know. Let’s get started👇
- What is an ombudsman?
- Why is the new Ombudsman being introduced?
- How will the new Ombudsman work?
- What are the implications for landlords?
- What are the implications for letting agents?
- When will the Ombudsman service be introduced?
- Which organisation will take on the role of the new Ombudsman?
- Conclusion
What is an ombudsman?
An ombudsman is an independent body established to resolve disputes between consumers and service providers without court involvement. Often referred to as a redress scheme, an ombudsman provides fair, impartial, and legally binding decisions and remedial action when complaints arise, typically at no cost to the consumer.
Ombudsmen exist across many sectors to protect consumer rights and reduce the strain on the court system (I’ll chat about this more later). Now, the new Private Rented Sector Ombudsman will extend this model to the private rented sector.
For tenants, this means they can make complaints about their landlord in a supportive, low-pressure environment. For landlords and agents, it’s a way to handle the complaints procedure before formal legal action is necessary.
According to the Private Rented Sector Ombudsman guidance, the body will offer “quick, fair, impartial and binding resolution for tenants’ complaints about their landlord.”
Exactly how quick remains to be seen…
Why is the new ombudsman being introduced?
Currently, private tenants can make complaints via two redress schemes:
- The Property Ombudsman (TPO) - an independent, not-for-profit organisation
- The Property Redress Scheme (PRS) - a government-authorised consumer redress scheme
However, they can only use these to complain about letting agents, not landlords. This raises a couple of issues.
Firstly, according to the 2024 English Private Landlord Survey, 52% of landlords reported that they didn’t use a letting agent. This makes it challenging for the tenants they serve to make complaints without pursuing legal action.
Secondly, 48% of landlords who do work with an agent can refuse the requests the agent makes on the tenant's behalf. This puts you in a tricky spot and makes it difficult to find a resolution for the tenant.
The new Ombudsman is designed to address these systemic issues. By introducing an overarching infrastructure to handle housing complaints and resolutions for tenants, the government believes it will:
- Standardise the experiences of private and social housing tenants
- Dramatically reduce the load on the court system
The second point here is critical. Many PRS stakeholders believe that the government will overload the courts by removing Section 21 without reform.
Introducing the Private Rented Sector Ombudsman, while retaining the existing ombudsmen, will help to resolve more issues out of court and reduce this load.
Although strategies like this should be praised, the jury is still out on how effective they’ll be.
How will the new Private Rented Sector Ombudsman work?
The Ombudsman will operate as an independent service, designed to help private tenants sort out issues with their landlord without going to court, just like social housing residents can.
It’ll look at complaints covering every stage of the rental process, from how the property was advertised, to problems during the tenancy, and even after the tenant has moved out.
According to the government’s official guidance, tenants will be able to raise complaints either online or by telephone, with extra support in place to help vulnerable renters too.
However, we still lack clarity on whether offline complaints will be recorded online. This would make sense in the spirit of the government’s broader efforts to digitise and enhance transparency.
What will tenants be able to complain about to the Ombudsman service?
Tenants will be able to raise complaints about anything a landlord has done or failed to do that’s caused them harm, stress, or inconvenience. This might include poor communication, dragging their feet on repairs, or brushing off previous complaints.
There’s no rigid list in the Renters’ Rights Bill of what counts as a valid issue, which means the Ombudsman can look at each case in context and decide what’s fair. The whole point is to give tenants a proper route to be heard and get a reasonable outcome.
"Local councils will be able to take action against landlords who fail to join, or against anyone who markets a PRS property where the landlord is not registered."
What are the implications for landlords?
The introduction of the Ombudsman marks a significant shift in how landlord-tenant disputes are handled. For the first time, landlords will be subject to binding decisions if a tenant lodges a complaint, and the consequences of failing to adhere to them are serious.
What if a landlord doesn’t join the Ombudsman?
Once the scheme becomes mandatory, all private landlords will be legally required to register, whether they manage the property themselves or through an agent. Failing to do so could lead to a civil penalty of up to £7,000. Repeat offenders could face fines of up to £40,000 or even criminal prosecution.
And it’s not just the landlord who could be in trouble. If a letting agent markets a property for a landlord who hasn’t joined the scheme, you could face the same penalties.
For example, in its Guide to the Renter's Rights Bill, the government states:
"Local councils will be able to take action against landlords who fail to join, or against anyone who markets a PRS property where the landlord is not registered."
What penalties could landlords face if they ignore an Ombudsman’s decision?
If a landlord fails to comply with a decision made by the Private Renters’ Ombudsman, the consequences can be serious, particularly in cases of repeated or wilful non-compliance. They may be:
- Expelled from the Ombudsman scheme, preventing them from legally renting properties.
- Pursued through the courts, allowing the ombudsman’s rulings to be enacted.
- Served a Rent Repayment Order (RRO) which allows tenants to claim up to two years’ rent.
In its Guide to the Renters' Rights Bill, the government states that it’s doubling RROs from 12 to 24 months to increase “the deterrent effect of rent repayment orders and making them more appealing for tenants and local authorities to pursue.”
Can landlords complain to the Ombudsman about their tenants?
No, the Private Renters’ Ombudsman is specifically designed to protect tenant rights, and only tenants will be able to bring complaints under the scheme. It would be inappropriate for landlords to seek binding decisions about tenant behaviour through this service.
That said, the government has recognised that landlords may also need support. Discussions for alternative mediation options to help landlords resolve issues with tenants without resorting to court are ongoing, but nothing has been finalised.
Will there be any membership fees to join?
Yes, landlords will need to pay an annual fee to join the Ombudsman. This fee will be set by the Ombudsman service itself and is intended to cover the cost of running the scheme. The government has said it’ll aim to keep the fee proportionate, acknowledging the rising fees that landlords have to contend with. However, it’s still compulsory for landlords to join.
“I assure the House that we are committed to ensuring that landlords who choose to leave the sector can exit the Ombudsman scheme as quickly as possible; this is not a ‘Hotel California’ Ombudsman where you can check out but never leave."
Do former landlords need to retain their membership even after they stop letting properties?
In the committee stage of the Renters’ Rights Bill, Baroness Taylor of Stevenage, Parliamentary Under-Secretary of State at the Ministry of Housing, said:
“As part of the implementation process, we will work with stakeholders to ensure that the period of time for which former landlords are required to remain members of the scheme is appropriate and proportionate.
“I assure the House that we are committed to ensuring that landlords who choose to leave the sector can exit the Ombudsman scheme as quickly as possible; this is not a ‘Hotel California’ Ombudsman where you can check out but never leave.
“However, this needs to be balanced with giving tenants sufficient time for issues to come to light and for them to escalate complaints after their tenancy has ended.”
What are the implications for letting agents?
Currently, agents often end up stuck in the middle of individual disputes, trying to resolve tenant complaints even when the landlord isn’t cooperating. That’s because there’s no formal redress scheme for landlords, only for agents.
With the new Ombudsman in place, that burden will be shared. Landlords will have to register, no matter how they manage their properties. That means they’ll be directly accountable, making it easier to support tenants without taking on more than your fair share of responsibility.
5 ways to prepare for implementation
- Keep landlords informed - Ensure that your landlords know that registration with the Ombudsman is mandatory.
- Review landlord relationships - Take a look at how much responsibility you’re currently taking on. The new scheme could be an opportunity to reset boundaries and ensure that landlords fulfil their responsibilities.
- Sharpen your processes - Have clear procedures in place for handling complaints, so nothing falls through the cracks and everyone knows where they stand.
- Offer extra support - For landlords who find compliance overwhelming, position yourself as the go-to expert to help them stay on top of the changes.
- Stay updated - Follow developments on the Renters’ Rights Bill to avoid being caught off guard by new obligations.
“[The government] intends for the details of the scheme to be published with significant lead-in time and to be piloted before landlords are required to be members.”
When will the Ombudsman service be introduced?
While the government is committed to securing Royal Assent, abolishing Section 21 and introducing tenancy reform as soon as possible, it’s taking a more considered approach to the housing Ombudsman.
During the committee stage of the House of Lords, Baroness Taylor said: “We intend for the details of the scheme to be published with significant lead-in time and to be piloted before landlords are required to be members.”
Of course, the sooner the government releases this information, the better agents can quell landlords’ fears and manage the transition.
Which organisation will take on the role of the new Ombudsman?
During the committee stage of the House of Lords, Baroness Taylor said:
“As we have said before, the Government’s preference is for the Housing Ombudsman Service to deliver private landlord redress. While not a final decision, if this is the case, we anticipate that appointment of the responsible individual will mirror the public appointment process for the existing Housing Ombudsman in the social rented sector.”
This aligns with the government’s efforts to standardise the tenant experiences delivered by private and social housing providers.
However, it’s worth noting that there was a 474% increase in complaints about property standards and substandard living conditions between 2019 and 2025. This raises the question of whether the Housing Ombudsman service can also cope with PRS complaints.
As a result, the government has allowed scope for other schemes to operate if needed.
Conclusion
By introducing the Private Rented Sector Ombudsman, the government aims to crack down on rogue landlords and raise standards for tenants.
Because the vast majority of landlords in the private and social housing sectors provide a quality and much-needed service to residents, the Ombudsman shouldn’t be a great cause for concern.
For agents, the new redress scheme provides an opportunity.
So-called “accidental landlords” who don’t yet work with an agent will need experts who can guide them through the minefield of regulatory changes. And you can fill that vacant role.
Please note this is intended as a guide only and is not exhaustive. Read more about the proposals at bills.parliament.uk.
