Self-managing landlords to face 17x increase in risk!

30 Sep 2025

This is an AI simulation showing the expected penalties faced by self-managing landlords before and after the Renters’ Rights Act. ChatGPT suggested a 17x increase in risk, whereas Gemini suggested an 18x increase. Below are the prompt and the output for both engines.

The Prompt

I want to make a comparative analysis of risk for landlords who manage their properties themselves before and after the Renters' Rights Act -RRA- comes into effect.

Using the Tort law formula of expected penalties (Fine x Probability), give me the expected fines today and once the RRA is implemented, considering the following: Fine takes into account licence penalties as disclosed in the press and on specialised sites like landlordzone, the NRLA, Kammadata.com and the likes, as well as civil penalties and Rent Repayment Orders -RROs- enforced today that you can find online; Probability considers the number of landlords in the market compared to the ones that are fined. Infer the increase in fines from sources like Kammadata and other online sources like councils, public records, and the press.

Once the RRA is implemented, use all the potential fines, penalties and RROs provided for in the RRA, considering that: council enforcement becomes mandatory, tenant enforcement is fuelled by the RRO enticement and publicity it will gather, and the expected reduction in the number of landlords given how many exit the market, which you can infer from online publications and articles.

Please provide me with the formulas and their corresponding content, including the sources for each input.

1. Answer from ChatGPT-5 with advanced reasoning (27/09/25)

Expected Penalty Risk for Self-Managing Landlords

Comparative Analysis: Pre-RRA vs Post-RRA

Methodology: Tort-Based Risk Formula

Expected Penalty (E) = Probability of Enforcement (P) × Magnitude of Penalty (M)

P = Likelihood of enforcement (civil penalty or Rent Repayment Order).
M = Average size of penalty or repayment ordered.

Data and Estimates

Pre-RRA (Current Legal Framework)

Total PRS landlords: ~2.4 million (DLUHC / Explanatory Notes)
Enforcement activity(2022):

~6,540 fines across 50 councils = £327M (Kamma)
Extrapolated UK-wide: ~0.27% enforcement rate (1 in 370 landlords)

Average fine (weighted):

HMO offences: £10–30k
Illegal eviction/deposit: £3–15k
Estimated average: £9,000

Expected Penalty (E₁) = 0.0027 × £9,000 = £24.30/year

Post-RRA (After Renters’ Rights Act comes into force)

Enforcement becomes mandatory(Clause 97)
RRO max duration doubles: 1 year → 2 years’ rent
More offences eligible for RRO: misleading notices, PRS Database, etc.
Increased visibility via Ombudsman & PRS Database
RRO award automation for repeat offenders
Estimated enforcement volume:
- 300 councils extrapolated = ~50,000 fines/RROs/year
Landlord base reduced by 10% (NRLA exit trend) → 2.16M
Revised enforcement rate = ~2.3%
New average penalty (RRO + civil): £18,000

Expected Penalty (E₂) = 0.023 × £18,000 = £414/year

Comparative Table

Stage	Avg. Penalty (M)	Enforcement Rate (P)	Expected Penalty (E)
Pre-RRA	£9,000	0.27%	£24.30/year
Post-RRA	£18,000	2.3%	£414/year

Risk increases ~17× under the RRA

Key Policy Drivers Behind the Increase

Mandatory enforcement duty on local authorities (Clause 97)
Expanded Rent Repayment Orders (RROs) for more offences (e.g. misleading notices, database violations)
RROs period doubled to 2 years
Repeat offenders subject to maximum RROs
Civil penalties: £7,000 (first) → £40,000 (repeat/multiple)
Public PRS Database enables tenant-led enforcement
Superior landlords and company officers now also liable for RROs

Sources

Kamma Data:
£327M fines from 50 councils and 2022 record year for fines
Renters’ Rights Bill — final version
Explanatory Notes (EN_240008en.pdf) — 2025
Guide to the Renters’ Rights Bill – GOV.UK (May 2025)
NRLA, Inside Housing, tribunal decisions, FOI disclosures

2. Answer from Google Gemini 2.5 Flash (27/09/25)

Comparative Risk Analysis for Self-Managing Landlords: Before and After the Renters' Rights Act (RRA)

This analysis uses the Tort Law formula for Expected Penalties (E=Fine×Probability) to compare the financial risk for self-managing UK landlords today versus after the projected implementation of the Renters' Rights Act (RRA). The key driver of the increased risk is the RRA's shift from largely reactive enforcement to mandatory duty-driven enforcement, coupled with the doubling of Rent Repayment Order (RRO) maximums.

1. The Tort Law Formula and Inputs

Component	Before RRA (1)	After RRA (2) (Revised Projection)	Source / Derivation
Average Fine (F)	£15,000	£25,000	F1: Inference from current £30,000 max civil penalty. F2: Inference based on £40,000 max civil penalty and RROs doubled to 24 months' rent (Propertymark).
Total Landlords (L)	2,820,000	2,538,000	L1: UK estimate (Confused.com). L2 Assumes a 10% exit rate due to RRA pressure (LandlordZONE).
Annual Significant Fines (X)	1,000	10,000	X1: Estimate based on low visibility/reactive enforcement. X2: REVISED 10× increase projection due to mandatory council enforcement and doubled RRO tenant incentive.

2. Comparative Risk Calculation

Metric

Calculation

Before RRA (E1)

After RRA (E2)

Probability (P)

P=LX

P1 =2,820,0001,000

≈0.000355 (0.0355%)

P2 =2,538,00010,000≈0.00394 (0.394%)

Expected Penalty (E)

E=F×P

E1=£15,000×0.000355≈£5.33

E2=£25,000×0.00394≈£98.50

3. Risk Conclusion

The implementation of the Renters' Rights Act is projected to increase the financial risk for self-managing landlords by a factor of over 18 times.

Risk factor	Increase	Primary driver
Increase in Fine (F)	1.67×	Doubling of the maximum RRO period (12 to 24 months' rent).
Increase in Probability (P)	11.10×	Mandatory council enforcement duty and increased tenant incentive from doubled RRO payouts.
Total Expected Risk (E)	18.48×	The exponential increase in enforcement and likelihood of being caught.

Boris Drappier

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