Weak compliance files are now costing London landlords remortgage options

Poor paperwork is starting to shut landlords out of mortgage deals before any new rental law has even taken effect.

That is the practical message from OSB Group’s Ian Scarrott, speaking at The Mortgage and Protection Event, where he said buy-to-let is becoming more complex and the sector is shifting towards larger, more professional landlords. For London owners, the key point is straightforward: compliance gaps are no longer just a legal headache. They are increasingly a lending risk.

The Renters’ Rights Bill has been introduced to Parliament but is not yet in force. Landlords should not treat proposed reforms as current law. But lenders do not need to wait for commencement dates before changing how they assess risk. If they believe future regulation will make poorly managed properties harder to run, they can respond now with tighter underwriting, narrower product choice and closer scrutiny of documentation.

Why London landlords are more exposed

London landlords are more likely to own the kinds of properties that already attract deeper checks: HMOs, converted flats, leasehold stock and homes in selective or additional licensing areas. In boroughs such as Newham, Waltham Forest, Southwark and Haringey, that means extra layers of paperwork and management obligations on top of national rules.

When a refinance lands on an underwriter’s desk, the issue may not be the rent alone. It may be whether the property is correctly licensed, whether safety certificates are current, whether the tenancy paperwork is complete and whether the landlord can evidence competent management.

The finance risk behind weak records

Many smaller landlords still rely on outdated ASTs, scattered email chains and incomplete repair logs. That was always risky. It is now more expensive.

If a lender asks for proof of rental income, deposit compliance, safety records, licensing status or a portfolio schedule, weak administration can mean delays, worse pricing or a failed application. For portfolio landlords and limited company borrowers, the tolerance for untidy submissions is shrinking fastest.

At minimum, landlords refinancing in the next 12 months should have ready access to:

• current tenancy agreements
• deposit protection certificate and prescribed information
• gas safety record
• EICR
• EPC
• licence documents where required
• rent schedule and bank statements showing rent received
• repair and complaint logs

For HMOs and other licensed properties, add the licence, any conditions attached to it and evidence those conditions have been met.

Licensing problems can derail a remortgage

Licensing failures are not just an enforcement issue. They can affect valuation, lender appetite and the perceived stability of the income stream.

That matters in London, where borough enforcement is active and schemes vary sharply by area. A missing or expired licence can trigger questions a broker cannot solve once the case is in underwriting. In serious cases, landlords also face wider exposure: civil penalties for certain housing offences can reach £30,000, and rent repayment orders can be made for up to 12 months’ rent.

Possession evidence matters before the law changes

Some landlords are still treating record-keeping as something that only matters if possession action starts. That is a mistake.

Even before any Renters’ Rights reforms take effect, poor records can weaken a landlord’s position in disputes over arrears, repairs or property condition. Inspection notes, complaint histories, works records and tenant communications should be treated as core risk documents, not optional admin.

If the Bill becomes law in broadly its current form, landlords with standardised documents and documented processes will be in a much stronger position than those still relying on habit and memory.

Casual landlords are not exempt

This shift is not limited to large portfolio operators. A landlord with one flat in Merton or Kingston may still meet affordability tests, but weak paperwork can still become a credit issue if the lender wants clarification on deposit compliance, repairs or a historic tenancy variation.

That is why the market’s move towards more professional standards matters even to accidental landlords. You do not need a large portfolio to be judged on how you run it.

Three actions to take this month

First, if any fixed rate or mortgage term ends within the next 12 months, ask a specialist buy-to-let broker for an eligibility review now.

Second, carry out a document audit for every property within 30 days, covering tenancy, deposit, safety, repair and licensing records.

Third, if your tenancy agreements or possession procedures have not been reviewed in the past year, update them with a solicitor or specialist adviser before your next re-let or renewal.

Rentals and Sales can help London landlords build a refinance-ready compliance file and identify licensing or paperwork gaps before they cost you mortgage options.