This guide highlights widespread non-compliance, particularly failures in HMRC registration, documentation, and reporting obligations.
Audits, which were undertaken in 2026, also highlight the most common issues and confirm the need for staff training to fully understand the responsibilities to avoid penalties.
From 6 April, 125,000 landlords and sole traders in the property sector must use Making Tax Digital (MTD) software, in the biggest change to the Self-Assessment system since 1997. Support is available to those impacted, and HMRC has confirmed that no penalties will be issued for late quarterly updates in the 2026 to 2027 tax year as the system beds in.
The Renters’ Rights Act directly addresses rental discrimination practices, and the UK and Scottish governments have worked closely to extend these protections to Scotland. The new rules make it illegal for landlords and letting agents to disadvantage prospective or existing tenants because they have children or receive benefits.
Prioritising clear, proactive communication, ensuring transparent agreements and fees, and keeping robust records of actions and transactions are the top ways agents can reduce the likelihood of complaints escalating to formal disputes in an increasingly regulated housing market. The findings from The Property Ombudsman (TPO) reinforce the value of strong training, clear processes, and high service standards in maintaining trust with consumers and protecting the reputation of the sector.
Reforms coming into force during 2026, following the Employment Rights Act 2025, will affect recruitment, staff management, and workplace policies across the UK, including in property agencies. With many firms employing a mix of negotiators, property managers, administrative staff, and apprentices, understanding the changes early will help agencies remain compliant and continue to operate effectively.