Following Royal Assent of the Renters' Rights Act 2025 (the Act), the world of residential property is about to experience the biggest seismic change since the introduction of assured shorthold tenancies (ASTs) in 1988. We have summarised some of the key changes, key dates and what impact we predict this will have on the UK letting market.
What's happening?
- The abolition of ASTs and 'no fault' evictions pursuant to section 21 of the Housing Act 1988 (the 1988 Act).
- Every residential tenancy (save for some exceptions) will be assured periodic tenancies (APTs) which will continue on a monthly basis until terminated by the landlord or the tenant. This means that a landlord will not be able to enter into a fixed term tenancy.
- A tenant can give not less than two months' notice to terminate an APT.
- A landlord must serve a notice pursuant to section 8 of the 1988 Act to terminate an APT. Notice periods will vary depending on the statutory ground relied upon – many require not less than four months' notice, although not less than four weeks' notice is required for rent arrears. New grounds for possession are also introduced, including where the landlord wants to sell the property.
- A landlord can only increase the rent once a year by serving notice on the tenant, giving not less than two months' notice, of a proposed increase. Tenants can challenge a proposed increase and apply to the First-Tier Tribunal for a determination of the open market rent (which cannot be higher than rent proposed by landlord). A rent increase only takes effect once the First-tier Tribunal has made a determination, so it seems likely that it will often be in a tenant's interest to challenge a proposed increase even if just to delay when an increased rent will become payable.
- There is a ban on a landlord accepting advance rent payments of more than one month. This means that landlords can no longer accept substantial rent payments in advance at the beginning of a tenancy.
- There is a ban on rental bidding – a landlord or its agent must not invite or accept offers of rent that are higher than the rent stated in the advert to let a property.
- There is the introduction of a private rented sector database, with financial penalties and the inability to obtain possession if a landlord is not registered on the database.
- The Act makes further changes including introducing a Private Rented Sector Landlord Ombudsman Service, prohibiting rental discrimination, giving tenants the right to request to have a pet in respect of which a landlord must not unreasonably withhold consent, introducing a Decent Homes Standard and extending Awaab's Law to private rentals.
- Importantly, these changes do not apply to common law tenancies, including residential tenancies granted to a company and residential tenancies where the annual rent exceeds £100,000.
When is it happening?
The key date to be aware of is 1 May 2026. This when the majority of provisions in the Act come into force, including the abolition of ASTs/section 21 notices and the introduction of APTs. All ASTs will automatically convert into APTs on this date.
The private rented sector database is due to go live in late 2026, following which landlords will need to be registered.
The Act also contains transitional provision with the effect that:
- possession proceedings issued following a section 21 notice before 1 May 2026 will remain valid
- Section 21 notices served before 1 May 2026 will remain valid until the earlier of:
(i) six months after date of service of section 21 notice
(ii) three months from 1 May 2026 ie 1 August 2026.
What will the impact be?
Landlords may decide to sell their properties and seek to terminate tenancies under section 21 in the run up to 1 May 2026. This could reduce an already insufficient stock of rental properties in the market and cause further upward pressure on rents.
The Act will place huge pressure on the Court system, which is already suffering with a significant backlog of possession claims. Currently, it can take approximately 9-18 months to evict a tenant and these timescales will not improve with the removal of the section 21 'accelerated possession procedure' which enables a possession order to be obtained without a hearing where there is no challenge. Changing the procedure so that landlords will be required to prove a statutory ground under section 8 will likely result in possession claims taking longer and being more costly.
Similarly, the Act will also place significant pressure on the First-tier Tribunal who, in addition to dealing with service charge and building safety applications, will not be expected to manage applications challenging rent increases and determining open market rents.
To mitigate these pressures, the Government has stated that it will digitalise possession claims and First-Tier Tribunal applications and ensure that the Courts and First-tier Tribunal have the resources and capacity they need to handle the additional workload. Digitalised possession claims are scheduled to be introduced in 2026, building up to the full service which will be operational around April 2027. Whilst this time delay creates the risk of an increased backlog, investment in these systems will be welcomed by both landlords and tenants.
Landlords are strongly encouraged to review their property portfolios so that they are prepared prior to 1 May 2026 and tenants should be alive to the fact that fixed term tenancies which go beyond 1 May 2026 will convert to a periodic tenancy.
Find out more
Please contact Stephen Burke, Senior Counsel in our Real Estate Disputes team if you require any assistance or further advice in relation to existing tenancies/termination of tenancies or Rachel George, Senior Counsel in our Residential Property team for assistance on entering into new tenancies/matters relating to sales or acquisitions.
