Renters Rights Act introduces landmark changes for landlords and tenants

Yesterday the Renters’ Rights Act 2025 became law significantly altering the way the private rental market will operate in England.

It will provide greater security of tenure to estimated 11 million households in England who rent their home and seeks to raise standards across the private rented sector to provide better housing.

Below are the main changes in brief:

1. The major change is the abolition of fixed term assured shorthold tenancies (ASTs). All new and existing tenancies will convert to periodic tenancies with no end date, even if they purport to grant a fixed term (unless that fixed term exceeds seven years). When a tenant wants to leave a property they can do so by giving two months’ notice rather than being tied in for a longer term.
2. “Section 21” or “no fault” evictions are abolished. Landlords will no longer be able to terminate a tenancy on two months’ notice.
3. Expanded and amended possession grounds are being introduced through amendments to Section 8 of the Housing Act 1988 reflecting the abolition of Section 21. If a landlord wants to sell or move into their property they will not be able to do so in the first 12 months of a tenant moving in. After this they will need to give four months’ notice.
4. It is still possible for landlords to evict tenants in certain circumstances such as if the tenant damages the property, commits antisocial behaviour or where there are significant rent arrears. These “fault” evictions are still permitted. The mandatory threshold for eviction for rent arrears is increased from 2 months’ arrears to 3 months with the notice period increasingly from 2 weeks to 4 weeks.
5. Landlords and agents will be prohibited from encouraging rental bidding wars or accepting offers of rent higher than advertised for a letting. Instead there must now be a set asking rent.
6. Demands for rent in advance of the start of a tenancy are prohibited. Landlords will only be entitled to demand a maximum of one month’s initial rent at the start of the tenancy. Therefore landlords will not be able to favour tenants who offer to pay a number of months of rent in advance. There is no change to existing deposit caps introduced by the Tenant Fees Act 2019. These remain at 5 weeks rent where the annual rent is less than £50,000 and up to 6 weeks’ rent if the rent is £50,000 or more.
7. Landlords also face restrictions on increasing rent during the tenancy. Rental increases will be restricted to once a year and only to the “market rent”. Landlords will need to serve a “Section 13 notice” setting out the new rent and giving at least 2 months’ notice of it taking effect. Tenants will be entitled to challenge excessive rent increases in the First-Tier Tribunal.
8. There are strong anti-discrimination provisions especially in relation to prejudice against renters with children or those who receive State benefits. However landlords will still be entitled to carry out referencing and affordability checks and are now likely to screen potential tenants more carefully.
9. Landlords will also have to act reasonably in considering requests to have pets as tenants will be able to challenge unfair decisions such as insisting on payment of an additional deposit. In relation to flats, landlords will be bound by the provisions in the lease of their flat relating to pets and it will be reasonable for them to refuse a pet where that would place them in breach of their own lease.
10. The Decent Homes Standard (which currently sets the minimum quality standard for homes in the social rented sector) and Awaab’s Law (requiring social landlords to address hazards such as damp and mould) will now be applied to the private rented sector. Local authorities will be given powers of investigation and enforcement. Tenants can now no longer fear being evicted because they demand that their landlord carry out works on their properties to remove hazards prejudicial to health and safety.
11. A new Private Rented Sector Landlord Ombudsman Service redress scheme will be set up designed to provide a quick and cost-effective way of resolving disputes. In addition there will be a new Private Rented Sector Database which is intended to give tenants greater access to relevant information about landlords and rental properties and help Local Housing Authorities to target enforcement activity.
12. At present, corporate tenancies and tenancies with very high rent (over £100,000) are exempt from the new legislation because they continue to be excluded from assured tenancy status. But the Government could raise this threshold by statutory instrument, as it last did in 2010. Given inflation and rising rents the £100,000 threshold may be raised which will mean that many high rent tenancies will become affected by the new legislation.
13. Purpose Built Student Accommodation (PBSA) providers under new tenancies are also exempt from the new legislation allowing them to grant fixed term tenancies. This exemption is contingent on such landlords being members of a Government approved code of practice such as UUK.  Existing PBSA tenancies will become periodic tenancies but with a special possession ground allowing landlords to terminate a tenancy in order to accommodate a fresh intake for the new academic year.
14. Landlords of HMOs (houses in multiple occupation) let to students will be able to evict them to allow for new tenancies. However more than half the occupiers in the property will need to be students and the landlord will need to give at least four months’ notice.

In the coming weeks the Government will announce how and when each of the changes will come into force. Therefore there is no overnight change and landlords and tenants will need to “watch this space” to learn when each of the changes will actually take effect.

The changes are likely to put increased pressure on the Court and Tribunal system which could lead to significant delays and the Government is going to have to consider how to reduce that risk by better resourcing.

Landlords have been operating in an increasingly tough letting landscape over the past few years. Now they will be subject to even greater regulation and constraints and in some instances could face tough sanctions for non-compliance. Whilst the Government claims that protecting landlords’ interests through strengthened repossession grounds will support continued investment in the private rented sector there are many landlords who would disagree. The restrictions on rent increases, not being able to receive advance payment of more than one month’s rent and the risk of a tenant leaving after only two months means being a landlord in the private rental sector is more financially precarious than ever before.