Housing Ombudsman Service Compensation Guidance

The Housing Ombudsman Service (HOS) has issued new guidance on compensation social tenants would be entitled to following failings by their landlords. The guidance can be found here. 

The guidance follows the HOS’ latest ‘Learning from severe maladministration’ report which focused on compensation and what transpires when landlords do not operate it fairly.

The guidance sets out the HOS’ position on:

• when it orders compensation in its casework
• how it calculates appropriate sums of compensation 
• how a landlord’s offer of compensation is considered within its casework

Effective from 1 April 2026, the guidance sets out the key principles for a fair approach to compensation and seeks to make clear expectations and encourage consistency. The HOS has confirmed that both landlords and residents were consulted when putting together the guidance.

The HOS has suggested that landlords should have their own compensation policy in place and that the new guidance should be consulted when adopting their approach.

Richard Blakeway, Housing Ombudsman, has stated that “There should be a single vision of fair compensation shared across the sector. At the heart of compensation is fairness...fair compensation can go a substantial way towards restoring trust amongst residents and prevent complaints escalating to us”.

The HOS has confirmed that its orders of compensation are a form of remedy with the aim to put the resident in the position they would have been had the maladministration not happened, rather than being a form of punitive measure against landlords.

The guidance sets out the types of loss for which the HOS would award compensation including:

• Quantifiable financial loss – e.g. rent overpayments, works a landlord agreed to pay for but did not, and decorating costs incurred after the landlord’s repairs works have been inadequately completed
• Unquantifiable financial loss – where satisfied that, on the balance of probabilities, a resident incurred or suffered financial loss but is unable to evidence this
• Loss of use of the property – where due to the maladministration the resident has lost use of part or all of the property. For tenants, compensation is based on a percentage of rent charged depending on the room affected
• Specific compensation orders – awards made for the non-provision of specific services such as heating and hot water, power, missed appointments
• Impact of other service failings – e.g. distress and inconvenience, or time and trouble. The HOS will consider aggravating factors based on the resident’s own circumstances together with any mitigating factors such as actions taken the landlord and/or resident. In addition, any payments set out in statute such as home loss and disturbance payments
• Complaint handling – e.g. delays during complaints process, improper refusal or failure to log a complaint, and failure to adhere to the Complaint Handling Code 

The guidance also confirms the circumstances when the HOS would not order compensation which include:

• Record keeping failures
• Time, trouble and minor costs incurred by a resident when requesting a service or pursuing a complaint
• Decisions on negligence, liability or discrimination which would need to be pursued through the court in a claim for damages
• Insurance claims
• Loss of wages or holiday entitlement
• Costs incurred where no prior notice was given to the landlord of the issue

The HOS also states that it will consider a landlord’s own compensation policy (if applicable) and how the landlord has applied this when dealing with a complaint. It is also possible that the HOS may award additional compensation when reviewing a landlord’s offer under its own guidance remedies.

The compensation awarded by the HOS can be calculated following consideration of many different factors and the reasons for any award will be set out in its report. The guidance states that “Evidence-based reasoning which is clearly explained leads to effective outcomes, including improved understanding of our decisions and sector learning”.

Given that the HOS guidance will not be effective until 1 April 2026, now is a key time for social landlords to review their policies and procedures relating to the award of compensation, and their complaint handling generally, to ensure compliance. 

Bevan Brittan’s Housing Policy, Advisory and Regulatory team can assist landlords in reviewing and/or amending their compensation policies in line with the guidance along with general complaint handling support. Should you require further advice at this time, please do not hesitate to contact Jabir Dar or Sarah Orchard.

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