Housing Civil Penalties: The New £7,000 HHSRS Regime and the Wider £40,000 Landscape
If you are a private landlord in England, you are now operating under two distinct civil penalty regimes, both of which can result in significant financial penalties for housing offences. On 22 June 2026, a new £7,000 penalty came into force under a completely new provision of the Housing Act 2004. Six weeks earlier, on 1 May 2026, the existing civil penalty regime was uprated from £30,000 to £40,000. These two regimes overlap in some respects, work independently in others, and require different responses when a Notice of Intent lands on the doormat. This guide explains both regimes clearly, sets out how they interact, and provides practical advice.
Key dates at a glance
1 May 2026
Housing Act 2004 s.249A and Housing and Planning Act 2016 s.23 penalties uprated from £30,000 to £40,000 (Renters’ Rights Act 2025).
22 June 2026
New s.6A Housing Act 2004 in force. Councils can impose up to £7,000 for Category 1 HHSRS hazards without prior improvement notice.
23 June 2026
Housing Health and Safety Rating System (England) (Amendment) Regulations 2026 come into force. HHSRS moves from 29 hazards to 21.
The £40,000 civil penalty regime under the Housing Act 2004 and Housing and Planning Act 2016
The first civil penalty regime landlords need to understand has been in operation since 6 April 2017. It was introduced by the Housing and Planning Act 2016 as an alternative to prosecution for a range of Housing Act 2004 offences, and it received a significant upgrade on 1 May 2026 when the maximum penalty was raised from £30,000 to £40,000 by the Renters' Rights Act 2025.
Which offences are covered?
Under section 249A of the Housing Act 2004, a local housing authority may impose a civil penalty for the following offences committed by a landlord or property agent:
• Failure to comply with an improvement notice (section 30, Housing Act 2004).
• Offences in relation to the licensing of houses in multiple occupation (section 72, Housing Act 2004).
• Offences in relation to licensing of houses under Part 3 of the Act – selective licensing (section 95, Housing Act 2004).
• Contravention of an overcrowding notice (section 139(7), Housing Act 2004).
• Breach of the Management of Houses in Multiple Occupation (England) Regulations 2006 (section 234, Housing Act 2004).
• Breach of a banning order (section 23, Housing and Planning Act 2016).
These offences are among the most commonly encountered in private sector housing enforcement, and civil penalties are now the most frequently used enforcement tool by local authorities, largely because they are quicker, easier and cheaper to impose than pursuing a criminal prosecution.
How the amount is decided
The maximum civil penalty is £40,000 per offence, but this maximum is reserved for the very worst cases. Councils are required to have a written civil penalty policy that sets out how they will determine the appropriate level in any given case. Most councils use a matrix or scoring system based on the following factors, taken from the statutory guidance:
• The severity of the offence.
• The culpability and track record of the offender.
• The harm caused to tenants.
• Any financial benefit obtained from committing the offence.
• The need to deter repeated offending.
• The need to remove any financial benefit obtained.
Transitional arrangements for pre-1 May 2026 offences
The £40,000 maximum applies only to offences committed on or after 1 May 2026. Where the conduct giving rise to the offence took place before this date, the previous £30,000 maximum applies. Councils are operating both regimes in parallel during the transitional period, which will continue for some years given the six-month rolling window for issuing Notices of Intent.
The Notice of Intent process
The process for imposing a civil penalty follows a strict statutory procedure:
Step 1: The council gathers evidence and forms the view that an offence has been committed to the criminal standard (beyond reasonable doubt).
Step 2: The council issues a Notice of Intent, stating the amount of the proposed penalty and the reasons and inviting written representations within 28 days. The notice must be issued within 6 months of the council having sufficient evidence (or while the conduct continues).
Step 3: The landlord makes written representations within 28 days. This is the single most powerful opportunity to challenge the penalty.
Step 4: The council considers representations and issues a Final Notice which may confirm the original amount, reduce it, or withdraw the penalty entirely.
Step 5: The landlord has 28 days from the Final Notice to appeal to the First-tier Tribunal (Property Chamber).
The 28-day representation window in Step 3 is the most important stage in the entire process. Detailed, well-prepared representations at this point are far more effective (and far cheaper for both parties) than an appeal to the Tribunal after the penalty has been issued.
The new £7,000 HHSRS civil penalty under section 6A of the Housing Act 2004
On 22 June 2026, a completely new civil penalty regime came into force. Section 6A of the Housing Act 2004, inserted by paragraph 6 of Schedule 4 to the Renters' Rights Act 2025, gives local housing authorities the power to impose a civil penalty of up to £7,000 where a Category 1 hazard is identified in a private rented property.
This is a genuinely new type of enforcement power in housing law. Unlike the s.249A regime, it does not require the council to have served an improvement notice or prohibition order first. The penalty can be imposed at, or shortly after, the initial inspection, giving rise to the widespread "on the spot fine" terminology used by government and the media.
When does the £7,000 penalty apply?
The section 6A civil penalty is triggered where all of the following are established:
• A Category 1 hazard (high rating under the new HHSRS bands) is identified at a private rented property.
• It would have been reasonably practicable for the responsible person (usually the landlord) to remove or reduce the hazard.
• The responsible person did not do so.
The council does not need to have taken any prior enforcement action. This represents a significant shift from the traditional two-step model (improvement notice followed by prosecution/civil penalty for non-compliance) to a single-step model where the finding of the hazard itself triggers the enforcement power.
Category 1 hazards only - not Category 2
The £7,000 penalty applies only to Category 1 hazards, those scoring 1,000 or more under the HHSRS methodology and now labelled "High" under the reformed banding system. Category 2 hazards (medium and low bands) cannot be the subject of a s.6A penalty, though councils retain their discretionary enforcement powers in respect of those hazards. The Category 1 threshold catches the most serious housing hazards, which most commonly include severe damp and mould, excess cold, fire risks, faulty electrics, unsafe stairs and structural defects. Government estimates suggest that around one in ten privately rented homes contains at least one Category 1 hazard.
The "reasonably practicable" test
A council may not impose an s.6A penalty simply because a Category 1 hazard exists. It must also form the view that it would have been reasonably practicable for the responsible person to remove or reduce the hazard. This is an important limitation, and it gives landlords who can demonstrate diligent management a real defence.
Draft statutory guidance suggests councils should consider:
• Whether the landlord had actual or constructive knowledge of the hazard.
• Whether the tenant had reported the issue.
• The time available to act between the report and the inspection.
• Whether reasonable steps were being taken at the time of inspection.
• Whether external factors were preventing action (e.g tenant refusing access, contractor delays).
How much? Draft starting points
Draft guidance sets a starting point of £6,000 per Category 1 hazard, adjusted up or down within the £7,000 maximum based on aggravating and mitigating factors. Multiple Category 1 hazards can produce multiple penalties, though where the hazards share a common cause (for example, a broken boiler causing both excess cold and damp/mould), a single penalty may be more appropriate.
Comparison of the two regimes
Comparison of the two civil penalty regimes now applying to English private landlords
How the two regimes interact
A single case can potentially engage both regimes. For example, an unlicensed HMO inspection might reveal Category 1 damp/mould, faulty electrics, and inadequate fire precautions. In that scenario, a council could theoretically pursue:
• A s.72 civil penalty (up to £40,000) for the unlicensed HMO offence.
• Multiple s.6A civil penalties (up to £7,000 each) for the individual Category 1 hazards.
• An improvement notice to require remediation.
• A prohibition order if the property is unsafe to occupy.
This is why the aggregate financial exposure for landlords with problem properties has increased substantially in 2026. Draft guidance stresses proportionality; councils are expected to consider the overall penalty burden and avoid disproportionate enforcement, but this is discretion, not an entitlement, and it depends on landlords making the proportionality argument in representations.
The wider Renters' Rights Act 2025 context
The two civil penalty regimes described above sit within a much broader enforcement landscape that has emerged from the Renters' Rights Act 2025. Landlords should also be aware of:
• New civil penalties of up to £7,000 for various breaches under the RRA 2025 (e.g rental discrimination against families or benefit recipients, rental bidding, failing to provide the tenancy information sheet)
• Increased civil penalties of up to £40,000 for repeated breaches (which become criminal offences under the RRA 2025).
• Enhanced Rent Repayment Order regime allowing tenants to recover up to 24 months' rent (increased from 12 months).
• Extended reach of Rent Repayment Orders to superior landlords in some circumstances.
• New Private Rented Sector Database (from late 2026) with civil penalties for non-registration.
The cumulative effect is that landlord exposure to enforcement penalties has increased significantly in 2026, and the enforcement toolkit available to local authorities is broader and more flexible than ever before. Landlords who have been operating on the basis of pre-2026 assumptions about enforcement risk could be exposed.
Key takeaways for landlords
• Two civil penalty regimes now operate side by side: the existing £40,000 regime (updated from £30,000 in May 2026) and the new £7,000 HHSRS regime (from June 2026).
• The new s.6A £7,000 penalty is "on the spot" - no improvement notice needs to be served first.
• Multiple hazards can attract multiple penalties, meaning the theoretical maximum exposure is much higher than £7,000 in serious cases.
• The "reasonably practicable" test in s.6A gives diligent landlords a real defence.
• The 28-day representation window after a Notice of Intent is the single most important stage in the process.
• Independent expert review of the underlying evidence, particularly HHSRS scoring, can materially change outcomes.
• Aggregate enforcement exposure has increased significantly under the wider Renters' Rights Act 2025.
What to do if you receive a Notice of Intent
Whether the Notice you have received relates to the s.249A regime (up to £40,000) or the new s.6A regime (up to £7,000), the same practical principles apply. The 28-day representation window is the most important opportunity. Missing it, or failing to make effective representations, is the single most common reason why landlords end up paying full penalties that could have been reduced or withdrawn. Do not ignore the Notice. This may seem obvious, but many landlords do exactly this, either because they hope the problem will go away, because they are overwhelmed, or because they do not understand what has been sent. Ignoring a Notice of Intent is the worst possible response. Once the representation window closes, the council can proceed directly to the Final Notice without any further input from you.
How Surrey Property Licensing can help
At Surrey Property Licensing, we provide independent expert support to landlords facing civil penalty action. Our work in this area includes:
• Reviewing Notices of Intent and the underlying evidence.
• Independent HHSRS assessment and scoring review.
• Detailed written representations to councils within the 28-day window.
• Appeal preparation for the First-tier Tribunal where necessary.
• General compliance advice to help landlords avoid enforcement in the first place.
Our background in local authority environmental health and housing enforcement means we understand how councils reach their decisions. If you have received a Notice of Intent or are facing housing enforcement action of any kind, please contact us as early as possible in the process.
This article is for general information only and does not constitute legal advice. Housing enforcement law is complex, and the specific facts of your case will affect the correct approach. The 2026 statutory guidance on both civil penalty regimes was in draft at the date of writing and remains subject to change. Always check the current position on GOV.UK or take professional advice before acting.
