The HHSRS was updated on 23 June, requiring landlords to keep homes free of Category 1 hazards.
Category 1 comprises hazards that, if left untreated, will cause a need for some medical attention.
Inventory Base’s calculation was based on government estimates of 504,808 privately rented homes with at least one Category 1 hazard, and an application of the maximum £7,000 fee.
Where serious hazards remain unresolved following enforcement action, penalties can increase to £40,000 for continuing or repeated breaches.
Biggest overhaul of HHSRS needs to be considered
Inventory Base said the reforms represent the biggest overhaul of the HHSRS in almost 20 years.
It said landlords, letting agents and inspection professionals should review inspection templates, assessment records, maintenance workflows and internal guidance to ensure they reflect the updated framework.
According to the latest English Housing Survey, the most common Category 1 hazards affecting privately rented homes are falls on stairs, impacting 244,032 dwellings, followed by excess cold, affecting 130,748 properties, damp, affecting 64,422 homes, falls on the level, affecting 48,445 properties, and falls between levels, affecting 36,040 homes.
Sián Hemming-Metcalfe, operations director at Inventory Base, commented: “The £7,000 penalty may grab the headlines, but the deeper risk is a broken evidential record.
“A 15-minute property inspection is not an HHSRS risk assessment, and it should not be treated as one. Its role is to capture the condition of the property at a specific point in time, record visible concerns and feed reliable evidence into the wider compliance process.
“The formal assessment sits within the golden thread of reporting: the initial HHSRS assessment, the inventory and check-in, interim inspections, maintenance records, fitness assessments and confirmation that remedial action has been completed.
“Where those records are disconnected, outdated or inconsistent, landlords and agents may struggle to show what was identified, when it was escalated and what was done about it. That is where regulatory exposure grows.
“The £3.5bn figure shows the theoretical scale of initial penalty exposure across the private rented sector. The practical issue is whether landlords and agents can evidence a continuous, defensible process from identification through to resolution.
“Updating a checklist alone will not solve that. The revised HHSRS needs to be built into the full reporting framework, so each inspection contributes to a clear, connected record rather than sitting as an isolated snapshot.”
