Civil Penalties Framework 2026: Starting Amounts and Guidance

Civil penalties were introduced by the Housing and Planning Act 2016 as an alternative to prosecution for certain housing offences. The Renters' Rights Act 2025 significantly expands both the range of offences covered and the maximum penalty amounts. The new maximums are £7,000 for minor offences and £40,000 for serious offences, up from £5,000 and £30,000 respectively. The government has also issued updated statutory guidance on how councils should determine penalty amounts, emphasising consistency, proportionality, and deterrence. For council officers, understanding this framework is critical. A poorly calculated penalty that does not follow the guidance will not survive a First-tier Tribunal appeal, wasting enforcement resources and undermining the deterrence effect.

The updated guidance recommends that councils establish a penalty matrix with starting amounts based on the severity of the offence and the culpability of the landlord. Severity is assessed on a scale from minor (low risk of harm, technical breach) through moderate (some risk of harm, negligent compliance) to severe (serious risk of harm, deliberate non-compliance). Culpability ranges from low (genuine oversight, first offence) through medium (should have known, some history) to high (deliberate, repeat offender, commercial motivation). A typical starting amount matrix might set the entry point for a low severity, low culpability offence at £500 to £1,000, rising to £25,000 to £40,000 for a high severity, high culpability offence. Councils should publish their penalty matrix in their enforcement policy to demonstrate transparency and consistency.

After establishing a starting amount, officers must adjust the figure based on aggravating and mitigating factors specific to the case. Common aggravating factors include: the landlord has previous convictions or civil penalties for housing offences; the offence was committed for financial gain (for example, avoiding licensing fees or safety certificate costs); the landlord has a history of poor compliance; vulnerable tenants were affected (elderly, disabled, families with young children); the landlord failed to cooperate with the investigation; and the breach continued for an extended period after notification. Common mitigating factors include: the landlord has no previous enforcement history; the breach was promptly remedied once identified; the landlord cooperated fully with the investigation; there were genuine personal circumstances (such as illness or bereavement); and the landlord has taken proactive steps to prevent recurrence. Each factor should be documented and its effect on the penalty amount clearly recorded in the decision notice.

The guidance requires councils to consider the landlord's ability to pay when setting the final penalty amount. This does not mean penalties should be reduced simply because a landlord claims financial hardship. Rather, the penalty should be set at a level that achieves deterrence for that particular landlord. For portfolio landlords with significant property holdings, a penalty at the lower end of the range may have no deterrent effect and should be increased. For a single-property landlord who inherited the property and is genuinely struggling, a lower penalty may be appropriate provided it still reflects the seriousness of the offence. Officers should request financial information from the landlord during the notice of intent period. If the landlord declines to provide financial information, the guidance states that councils are entitled to assume the landlord can afford any penalty up to the maximum.

Landlords can appeal civil penalties to the First-tier Tribunal (Property Chamber), which conducts a full rehearing of the case. The Tribunal can increase, decrease, or uphold the penalty. To minimise appeal risk, officers should ensure every decision notice clearly sets out: the offence committed with full particulars; the evidence supporting the finding; the starting amount and how it was determined by reference to the published matrix; each aggravating and mitigating factor considered, with an explanation of the adjustment made; the landlord's financial position and how it was assessed; and the final penalty amount with a clear rationale. Common reasons penalties are reduced on appeal include: failure to follow the council's own published policy; inadequate consideration of mitigating factors; penalties that are disproportionate to the offence; and insufficient evidence to prove the offence to the civil standard (balance of probabilities).

Under the Housing and Planning Act 2016, councils retain all civil penalty income and must use it to fund further housing enforcement activities. This creates a self-funding model where effective enforcement generates revenue that supports additional enforcement capacity. Councils should establish clear accounting procedures for civil penalty income, ring-fencing it for housing enforcement purposes. Regular reporting on penalty income, collection rates, and how funds have been reinvested helps demonstrate the value of enforcement activity to senior leadership and elected members. It also strengthens the business case for investing in proactive enforcement, which typically generates higher penalty volumes than reactive, complaint-driven approaches.