The Renters’ Rights Act 2025 (the “Act”) introduces significant changes to the private rented sector in England.
The Act has its roots in the Renters Reform Bill, which was introduced by the previous Conservative Government but fell away following the dissolution of Parliament. After Labour came into power, the reforms were revived. While Labour retained the core themes of the original Bill, it expanded the scope and ambition of the legislation to a level that can only be described as a fundamental restructuring of the private rented sector in England.
The point of the legislation is to give more protection to tenants in the private residential property sector. Which can be attested to the change in name from Renters Reform Bill to Renters’ Right Act. It is the government’s efforts to re-balance the relationship between Tenants and Landlords as it has long been the general public’s view that Landlords were the ones that held the power and unfortunately in some cases it has been witnessed that they have exploited said power. The framework is intended to give tenants greater security, while also creating new obligations for private landlords and bring up the standards of what is expected from landlords. From 1 May 2026, landlords will need ensure that their tenancy agreements, possession procedures and rent increase practices comply with the new regime.
While that may read well in principle, its practical effect on landlords may be less positive. The Act is likely to create additional administrative burdens and costs, and there is a risk that these consequences will be priced into investment decisions within the sector.
In the short term, this could reduce investor confidence and place further pressure on an already strained rental market. For those buying, selling or refinancing investment properties, it will also be important to consider how the new framework may affect the value, management and future letting of the property.
The Big Three:
- Changes in Tenancy Agreement
One of the most significant changes introduced by the Act is the abolition of Assured Shorthold Tenancies (ASTs). From 1 May 2026, landlords will no longer be able to create new ASTs, and existing ASTs will automatically convert into assured periodic tenancies.
In practice, this means that tenancies will continue on a rolling basis rather than for a fixed term. For landlords, this means that tenancy documents should be reviewed and updated. Agreements should no longer refer to fixed terms or ASTs in a way that conflicts with the new law. However, the tenancy itself will not end simply because the legal framework has changed.
Tenants will also be able to leave the property at any stage of the tenancy, provided they give at least two months’ notice, unless a shorter notice period has been agreed with the landlord in writing.
Understandably, some landlords may be concerned that this will lead to higher tenant turnover and more frequent void periods. A similar open-ended tenancy model was introduced in Scotland in 2017 through private residential tenancies (PRT). That experience provides a useful comparison, but not a complete answer. Some commentary suggests that landlords’ concerns around void periods did not materialise to the extent initially feared. However, more recent tenant survey data published by Tenancy Deposit Scheme (“TDS”) in January 2025, indicates that Scottish tenancies may be shorter-lived than those in England, with a higher proportion of Scottish tenants having moved into their current home within the previous two years.
The lesson for landlords is therefore not that the change will be risk-free, but that the impact may be mixed. Landlords should prepare for greater flexibility in tenant notice periods, while recognising that the true effect on turnover, void periods and rental income will only become clear once the new system is up and running and the wheels are in motion.
Section 21 “no-fault” evictions will no longer be available:
The Act removes the ability to use section 21 notices to end a tenancy without giving a reason. From 1 May 2026, landlords will need to rely on a valid legal ground for possession under section 8 of the Housing Act 1988.
This makes record-keeping more important. Landlords should keep clear evidence of any rent arrears, anti-social behaviour, property damage, breach of tenancy or other issue that may later support a possession claim. Possession will not be automatic simply because a notice has been served. If the tenant does not leave, the landlord will need to apply to court and prove the relevant ground.
This may be a particular concern for landlords where possession is required urgently, for example where a tenant is engaging in anti-social behaviour. In practice, obtaining possession can take a considerable amount of time, particularly if court proceedings are required. During that period, a landlord may be left in a difficult position where the tenant continues to cause disruption to neighbours or other occupiers, but the landlord is unable to recover possession immediately. This can create practical difficulties, damage relationships with other residents, and potentially affect the landlord’s reputation, even though the delay is largely outside the landlord’s control.
- Rent Reviews
Landlords will no longer be able to rely on rent review clauses for new rent increases after 1 May 2026. Instead, rent increases must follow the section 13 process. This means landlords will generally only be able to increase rent once per year, must give at least two months’ written notice, and must use the correct prescribed form. Any increase must not exceed the open market rent, and tenants will be able to challenge proposed increases before the First-tier Tribunal. This is another area of concern for landlords.
In practice, the ability to challenge rent increases may reduce certainty, particularly if Tribunal delays mean that a proposed increase is not determined for several months. There is also concern that tenants may have little practical downside in making a challenge, as the disputed rent increase will not take effect until the Tribunal has made its decision. This could affect landlords’ cash flow and rent review planning.
For example, if a rent increase is challenged and the Tribunal takes several months to determine the matter, the landlord may continue receiving the lower rent during that period. This may also disrupt the landlord’s rent review cycle, as a further rent increase cannot generally be sought until 12 months after the last increase takes effect.
The Government appears to have recognised this concern by allowing scope for future regulations to alter the date from which a Tribunal-determined rent increase takes effect. This could, in future, allow the increase to be backdated to the date specified in the landlord’s section 13 notice. However, unless and until such regulations are introduced, landlords should assume that the current position applies and ensure that any proposed rent increase is properly supported by market evidence.
- What advance payments can be demanded
Another important change concerns the amount of rent that landlords can require in advance. Under the Act, landlords will be restricted from demanding large upfront rent payments at the start of a tenancy. This is intended to make the rental market more accessible, particularly for tenants who may not have significant savings.
However, this may create practical concerns for landlords. Some tenants, including those with poor credit histories, irregular income, or limited UK rental history, may previously have been able to strengthen their application by offering several months’ rent in advance. If landlords are no longer able to accept or request those payments, they may become more cautious when assessing applications from tenants who appear financially higher risk.
This may also sit alongside wider pressures on the private rented sector. Landlords and property developers are already facing increased costs, including higher borrowing costs, inflation in building and maintenance expenses, and additional regulatory obligations, including building safety requirements introduced in response to the Grenfell tragedy. While these reforms are important, they may increase the overall costs of operating within the sector.
As a result, some landlords may view the new restrictions as part of a wider increase in administrative burden and uncertainty around return on investment. In practical terms, landlords should ensure that they do not request prohibited advance payments but should also strengthen their referencing process and ensure that affordability checks are carried out carefully before granting a tenancy.
What else?
Other areas of the Act are also worth noting. Tenants will have the right to request permission to keep a pet, and landlords will not be able to refuse consent unreasonably. Landlords should therefore avoid blanket “no pets” policies and consider each request on its facts, taking into account the type of property, the proposed pet and any reasonable concerns about damage or nuisance.
The Act will also introduce further measures in stages, including a new private rented sector database, a landlord redress scheme, restrictions on rental bidding, and stronger property standards through the extension of the Decent Homes Standard and Awaab’s Law to the private rented sector. These changes mean that landlords should not view the Act as limited to possession and rent increases only; it represents a broader shift towards greater regulation, transparency and tenant protection in the private rented sector.
Practical guidance for landlords
Landlords should:
- Review tenancy agreements and remove references to fixed-term ASTs, section 21 notices, rent review clauses and blanket “no pets” policies.
- Prepare for periodic tenancies from 1 May 2026, as existing ASTs will automatically convert.
- Use section 8 grounds for possession and keep clear evidence of arrears, anti-social behaviour, damage or tenancy breaches.
- Follow the section 13 process for rent increases, using the correct form, giving two months’ notice and supporting increases with market evidence.
- Check advance payment rules and avoid requesting prohibited upfront payments.
- Consider pet requests reasonably and give written reasons if consent is refused.
- Keep records of compliance, including notices, forms, tenant information sheets and proof of service.
- Monitor further changes, including the landlord database, redress scheme, Decent Homes Standard and Awaab’s Law.
