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The Act is intended to provide tenants of residential property stronger protections, including by ending ‘no fault’ evictions and strengthening tenants’ rights. It builds on the Renters Reform Bill that was introduced into Parliament by the previous Conservative government but was not passed into law before the 2024 general election. The Act goes further than the previous government had proposed and introduces stronger rights for tenants and stronger penalties for landlord non-compliance. With the number of renters in the UK at a record high, the Act is seen as a key means of protecting tenants from unreasonable landlord behaviour.
More specifically, the Act secures the following key changes:
From 1 May 2026 landlords will only be permitted to increase rent once a year on two months’ notice and must do so by following a process set out in statute. The process allows the tenant to challenge the initial rent or subsequent rent reviews in the courts if they consider this to be unreasonable. These provisions are aimed at tackling the rising rent crisis that has been seen in the UK in recent years.
The Act also aims to prevent bidding wars for residential lettings and prohibits accepting rent higher than the advertised amount. It therefore bans advance rent payments, something that has often been utilised by landlords to ensure a certain and forward looking income stream.
The Act abolishes section 21 ‘no-fault’ evictions after 30 April 2026. This means that landlords will no longer be able to terminate a tenancy without specifying a reason once the fixed term of the tenancy has ended. Instead, landlords will only be able to end a tenancy and gain possession of a property by serving notice on one of the grounds under section 8 and Schedule 2 of the Housing Act 1988.
The grounds for possession by the landlord have however been expanded under the Act, including a new ground allowing a landlord to regain possession if they intend to sell the property or they/their immediate family intends to move into the property.
The threshold under which a tenant needs to be in arrears in order to be evicted for non-payment of rent has increased from two to three months and a four week notice period now applies.
The ending of ‘no fault’ evictions is intended to prevent landlords from utilising the section 21 procedure in order to evict tenants without the need to give or prove reasons. It provides tenants with more certainty as to their rights to remain in a property. However, the changes ultimately mean that landlords find it a more difficult and cumbersome process to evict tenants from their property. This, combined with the increased regulation relating to evicting tenants for non-payment of rent, will not be welcomed by most landlords. Tenants however are likely to face better protections for ‘no fault’ evictions, albeit they cannot guard against a landlord wishing to take possession in order to sell the property or let it to a family member.
Assured shorthold tenancies have been abolished and therefore fixed term contracts for a set period of, for example, twelve months will no longer have legal force. All tenancies will move to an open‑ended periodic arrangement with no minimum length or fixed expiry date, known as Assured Periodic Tenancies (APTs). Tenants may leave at any time by giving two months’ notice, while landlords will only be able to recover the property by proving one of the permitted grounds.
The government intends for the new tenancy regime and the associated reforms detailed above to come into force on 1 May 2026, whilst other measures secured by the Act will likely come in in 2027.
Partly as a result of the changes and partly as a result of general economic conditions, landlords are exiting the market at very high rates, knowing they no longer have as much freedom in terms of rent levels, evictions and general day to day management of their property. Moreover because tenants will not be at risk by making an application to the courts to challenge rent as being unreasonable, there is a risk that challenges to rent will become routine, creating uncertainty for landlords and resulting in monetary and administrative costs.
Similarly, the changes to ‘no fault’ eviction rules mean that landlords have reduced flexibility in terms of evicting tenants and it will take landlords a longer period to gain vacant possession of their property, again having timing and cost implications. Those operating in the residential sector have also raised concerns that the courts are under resourced in terms of their ability to deal with the expected increases in proceedings following the provisions in the Act relating to rent setting in particular. However, the government has said that they are working with courts to ensure parties will have timely access to the tribunal.
Although the Act applies only to residential tenancies, it is likely that its impact will extend across the wider property sector. Investors in mixed‑use developments will be conscious of the financial impacts of increased regulations, as will developers proposing to bring forward new residential units for sale as they may find a lack of demand from previously reliable landlord clients.
This is a once in a generation change to residential tenancy legislation. Lawyers working in the real estate and real estate finance sector will need to ensure that their standard templates for residential landlord clients are updated to reflect the new obligations under the Act and that existing agreements are also updated as necessary.
With the end of no‑fault evictions and the additional time and expense this generates, lawyers will need to ensure that their landlord clients are advised on the new provisions and maintain thorough, up‑to‑date records of tenant behaviour and any relevant incidents.
Relatedly, lawyers will need to ensure that investors in rental properties are aware of the additional burden and expense that the Act brings in terms of property management and to build this into their operational budgeting.
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