Housing Ombudsman’s New Compensation Guidance: What London Landlords Must Do Before April 2026

Understanding the Housing Ombudsman’s Call for Fair Compensation

In March 2024, the Housing Ombudsman published a report alongside new guidance aimed at establishing a “single vision of fair compensation” for residents across all landlords and housing providers. This initiative, coming into force on 1 April 2026, seeks to standardise how compensation is awarded in response to service failings, ensuring it is fair, timely, and reflective of the true impact on tenants.

Why does this matter to London landlords? The Ombudsman’s guidance sets a sector-wide benchmark that landlords must meet to avoid complaints escalating and potential reputational damage. It also signals a shift toward more transparent, resident-focused dispute resolution.

Key Changes and Practical Implications

1. Consistent Application of Compensation Policies
Landlords must ensure their compensation policies are not only fair but applied consistently. This means no arbitrary decision-making or under-awarding that could lead to Ombudsman intervention.

2. Early and Proactive Compensation Offers
The guidance encourages addressing compensation at earlier complaint stages to resolve issues quickly. Delays in offering compensation risk exacerbating disputes and increasing complaint volumes.

3. Reflecting True Impact on Residents
Compensation awards should restore tenants to their original position as much as possible. This includes recognising non-financial impacts such as distress or inconvenience.

4. Incorporating Non-Financial Remedies
An apology or explanation is often a key part of compensation. Landlords must ensure these elements are integrated alongside financial awards.

5. Engagement with Residents
Understanding individual tenant circumstances is crucial. Landlords should adopt a more tailored approach rather than a one-size-fits-all compensation model.

What This Means for Different Landlord Profiles

• Single-Unit Landlords: Even small-scale landlords should review their informal compensation approach. Having a clear policy aligned with Ombudsman expectations will prevent escalation.

• HMO Landlords: Higher tenant turnover and shared facilities increase complaint risks. Proactive communication and fair compensation policies are essential.

• Portfolio Landlords: With multiple properties, consistency across teams handling complaints is critical. Standardised training and auditing will help maintain compliance.

• Accidental Landlords: Those less familiar with sector regulations should seek guidance now to update policies and staff training.

Action Steps for London Landlords Before April 2026

1. Review and Update Compensation Policies: Ensure your policy aligns with the Ombudsman’s guidance. This includes explicit criteria for compensation amounts and incorporating non-financial remedies.

2. Train Complaint Handling Teams: Implement training programmes emphasising early, fair compensation offers and understanding tenant impact.

3. Audit Past Compensation Cases: Identify where compensation may have been insufficient and prepare to address these gaps.

4. Enhance Tenant Communication: Develop clear, empathetic communication templates explaining compensation decisions and offering apologies where appropriate.

5. Monitor Regulatory Updates: The Ombudsman has signalled further consultations, including on Tenant Access to Information Requirements (STAIRs). Stay engaged to adapt promptly.

Benchmarking and Measuring Compliance

The Ombudsman has not published fixed compensation amounts, recognising the need for flexibility. Landlords should benchmark compensation locally by reviewing similar providers’ awards and Ombudsman decisions published on their website. This will help calibrate fair compensation levels relevant to their tenant demographic.

How Rentals & Sales Can Support You

Navigating these changes can be complex. Rentals & Sales offers tailored services including:

• Compensation policy reviews to align with new guidance
• Compliance audits focusing on complaint handling and compensation
• Training workshops for frontline teams
• Portfolio-wide reviews to ensure consistency

Our expertise will help you avoid costly disputes and strengthen tenant relationships.

Compliance Disclaimer: This article is for informational purposes and does not constitute legal advice. Landlords should consult qualified professionals for specific compliance requirements.