The Housing Ombudsman has published its latest ‘learning from severe maladministration’ report, this time covering compensation awards.

It is accompanied by new compensation guidance setting out the key principles for a fair approach to compensation including how to set clear expectations and encourage consistency. This guidance will be effective from 1 April 2026.

The ombudsman’s report is split into three sections. The first looks at landlords’ not applying their own compensation policies correctly. In one case, a landlord failed to offer compensation despite a resident and her four-year-old child living in damp and mould for three years.

The second section looks at when landlords increase the compensation after the stage 2 response. This misses the opportunity to put things right for the resident at an earlier stage. For example, one landlord offered over £2,000 more in compensation when the complaint was referred to the ombudsman.

The final section examined the difference between the ombudsman’s orders and the landlord’s offer. Sometimes the difference was significant. As an example, in one case the ombudsman offered 10 times the compensation to a resident living with a leak for years because the landlord’s award was so low.

In each case, the ombudsman says its compensation is not “punitive” or a “regulatory fine” but seeks to put residents back in the position they would’ve been had service failings not happened.

Richard Blakeway, Housing Ombudsman, said: “Compensation is emotive. When times are hard and budgets tight, for both residents and landlords, this can drive the wrong behaviours. It can result in residents expecting unrealistic redress for failings. Or organisations being institutionally reluctant to compensate.

“There should be a single vision of fair compensation shared across the sector.

“At the heart of compensation is fairness. Individual circumstances will lead to different awards but the core principles driving decision-making should be common.

“Non-financial orders, like apologies, matter greatly too. But fair compensation can go a substantial way towards restoring trust amongst residents and prevent complaints escalating to us.

“A virtuous cycle of improving complaint handling and proactive learning to prevent complaints will longer-term also reduce the need for compensation.”