Residential lettings and HMO management face a pivotal year in 2026 as new regulations, rising costs and higher tenant expectations reshape the sector.
From the Renters’ Rights Act to stricter HMO licensing and tighter profit margins, landlords and letting agents must adapt to remain compliant and profitable.
Efficiency, robust processes and the smart use of technology are becoming essential tools for success.
The year ahead will reward those who combine operational discipline with high-quality service, while harnessing automation to reduce administrative burden and keep teams focused on tenants and landlords alike.
REDUCING ADMIN
The best-performing letting businesses in 2026 will combine compliance, high service standards, and smart use of automation.
Technology should reduce admin burden, leaving teams free to focus on tenant satisfaction and property performance.
Here are the five biggest challenges in residential & HMO lettings in 2026 and how to overcome them.
RENTERS’ RIGHTS ACT
The Renters’ Rights Act 2025, effective from 1 May 2026, brings major changes to tenancy management, including periodic tenancies, possession routes, rent increases, and complaints handling. Mistakes in administration can now carry higher risk.
How to overcome it:
- Conduct a full audit of tenancy agreements and notice workflows, especially Section 8 and Section 13 processes.
- Build “gold-standard” files with documents, communications logs, and inspection notes.
- Train staff on the new rules and maintain a compliance calendar.
Landlords and agents cannot afford to treat compliance as optional. Those who audit processes, train teams and maintain clear records will navigate the Act successfully and avoid costly disputes.”
HMO LICENSING, INSPECTIONS AND ENFORCEMENT RISK
HMO licensing enforcement is increasing, with penalties escalating when multiple breaches occur. Missed deadlines or unaddressed licence conditions can carry serious consequences.
How to overcome it:
- Implement an HMO dashboard tracking licence dates, conditions, fire safety actions, inspections, and evidence storage.
- Treat compliance like routine maintenance: small monthly actions prevent bigger failures.
Proactive monitoring of HMOs reduces risk and keeps properties compliant. Waiting until inspections or deadlines loom is a recipe for penalties.
RISING COSTS AND PROFIT SQUEEZE
Borrowing costs, tax changes and increased property standards are squeezing margins, while tenants remain price-sensitive.
How to overcome it:
- Introduce a planned maintenance programme to reduce emergencies and protect asset value.
- Reprice management services using time-based costing.
- Offer landlords tiered upgrade options – good, better, best – tied to rentability.
RENT ARREARS, DISPUTES AND RECOVERY ROUTES
With stricter possession rules and service requirements, early intervention is critical to minimise arrears and disputes.
How to overcome it:
- Implement day 1 reminders, day 7 calls, and day 14 payment plans.
- Use clear affordability checks and guarantor processes where appropriate.
- Keep meticulous records of all communications and actions.
HIGHER TENANT EXPECTATIONS
Tenants now expect faster replies, transparent processes, and higher-quality living standards, especially in shared housing.
How to overcome it:
- Set internal service-level targets: response times, repair updates, and inspection frequency.
- Improve listing quality and onboarding to ensure expectations are clear from day one.
