The Renters’ Rights Act will come into effect from May 1st 2026, so there are only a few months left for landlords to fully understand the implications of the legislation changes.
To find out what the Act involves and how it will impact buy-to-let owners, read on.
Need a valid reason to evict
Tenants will be protected by the abolishment of Section 21 ‘no-fault’ evictions. This means landlords will not be able to give notice of eviction to renters without a legal reason.
These include selling the property, yourself or a close relative planning to live in the house or flat itself, planning substantial redevelopment of the property, or the asset being repossessed by the mortgage company.
With these grounds, four months’ notice needs to be given to the tenant, as opposed to the current two months.
Property owners will also not be able to relet their property for a year after using these grounds to evict the tenant. So if a landlord removes the inhabitant by putting it on the market, they cannot get another tenant in for 12 months after giving notice, even if they change their minds about the sale.
The landlord is still able to evict the tenant if they owe at least three months’ rent, if they cause significant damage to the property, if they exhibit antisocial behaviour, or if they gave a false statement when applying for tenancy.
Abolition of Assured Shorthold Tenancies (ASTs)
The government will abolish ASTs and replace them with Assured Periodic Tenancies (APTs). This means all tenancies will no longer be on fixed-term contracts, but rather the agreement will be rolling.
This provides tenants with greater security, knowing their tenancy will not come to an end after 12 or 24 months.
At the same time, it gives renters the flexibility of being able to move out of the property with just two months’ notice, instead of having to fulfil the term of the contract.
Therefore, landlords will no longer have the reassurance their property will remain inhabited for a particular length of time, and will need to be financially prepared to have an empty asset if the tenant chooses to leave.
Restrictions on rent increases
Under the new legislation, rents can only be increased once a year to the market rate. This is the same fee that the property would achieve if it was put on the rental market at the time.
In order to raise the rent, they will have to serve a Section 13 notice, which gives the tenant two months’ notice of the increase.
However, if the inhabitant disputes the rise, they can challenge this at the First-tier Tribunal, though they will never be made to pay more than what the landlord has asked for.
Written tenancy agreements compulsory
Before entering into a tenancy agreement, a written contract must be given to tenants. This should cover the changes in the Renters’ Reform Act, setting out their legal rights.
New tenants are required to sign the agreement before any rent can be paid to the landlord.
Removal of rental bidding
Demand for rental properties remains high, as a result of steep mortgage costs and a lack of available houses or flats to rent out.
Research from Rightmove revealed that tenants are now paying £400 more per month for their property than they were in 2020, with rents having climbed by 1.2 per cent from the first quarter of the year to the third outside of London.
Therefore, the new legislation is removing the possibility of bidding on rents, which would allow landlords to get the best fee for their asset, but also price many out of the rental market.
Instead, the monthly rent that is advertised at the letting agents for landlords has to be what they accept, and keen renters cannot bid higher than this.
No discrimination against tenants
Rental discrimination will be prohibited, which means landlords will not be able to prevent families with children or people in receipt of benefits from living in their property.
They can continue to carry out referencing checks and have the final call on who moves into their property, but their decision has to be based on the affordability of the potential tenant.
Cannot refuse pets
Landlords will also no longer be able to refuse tenants who have pets or prevent them from getting one.
Instead, they can make sure their property remains protected by drawing up a fair pet policy that stipulates expectations regarding property upkeep and the suitability of the flat or house.
