The Triple Compliance Tax: More Fees, More Red Tape

Landlords, particularly those operating in selective licensing zones, could soon be faced with a “triple whammy” of mandatory fees:

1. Existing Selective Licensing Scheme registration.
2. The new Private Rented Sector (PRS) Database registration fee.
3. The new PRS Ombudsman redress scheme fee.

Although the government has vaguely promised that the database and Ombudsman fees will be “proportionate and good value,” they have provided no operational timeline or confirmation on whether the two schemes will require separate payments.

The lack of clarity has drawn sharp criticism regarding complexity. Shadow Housing Minister James Cleverly argued that the government is “making it hopelessly complicated to rent out a property,” at a time when rental supply is already stressed. He called for the entire registration process to be consolidated into a simple “one-stop shop” to prevent further landlords from exiting the market due to excessive red tape.

High-Stakes Compliance: The Cost of Getting it Wrong

The new PRS Database is not simply an administrative nuisance—it comes with severe financial penalties for non-compliance:

• Civil Penalty: Landlords who let or advertise a property without it being properly registered on the database face a civil penalty of up to £7,000.
• Fraudulent Information: Providing false information to the database can result in a massive fine of up to £40,000.

Despite the threat of these fines, the Ministry of Housing maintains that the fees will be “reasonable and sustainable” and that the services funded will bring “substantial benefits” to landlords.

Political Hypocrisy: Adding to the industry’s frustration is the political context. The Shadow Minister highlighted the hypocrisy of new regulations by pointing out that Chancellor Rachel Reeves reportedly admitted to breaking housing law herself by renting out her family home without a selective licence, even while campaigning for such licensing schemes.

The Investor Takeaway: The clear implication is that compliance will become more costly and more aggressively enforced. Landlords must view the PRS Database and Ombudsman fees, when they arrive, as non-negotiable costs of business, rather than minor expenses.