The government's long-awaited Renters' Rights Act comes into force on Friday, 1 May. Labour says the new law will "level the playing field" between landlords and tenants, but many in the residential rental sector have been alarmed by the scale of the changes. There are concerns that many independent landlords will exit the market and sell their property. The government claims the rules will afford stronger protections to 11 million renters, but what do they mean for landlords?
No-Fault Evictions
The new laws will ban so-called no-fault evictions, also known as Section 21 evictions, which allowed landlords to serve notice on tenants ahead of the end of a fixed-term rental agreement. Landlords will no longer be able to end tenancy agreements in this way and will need to provide a legal reason – known as "grounds for possession" – to evict them. Landlords must also provide a notice period – usually four months – and then apply to the court to get their property back if the tenant refuses to move out. Labour housing minister Matthew Pennycook claimed tenants had previously used Section 21 to "arbitrarily" evict tenants who complain about faults with the property like damp and mould.
Fixed-Term Tenancies
The other major change being implemented by Labour is an end to fixed-term tenancy contracts. All tenancies will automatically become "rolling" after the law comes into force on Friday, meaning landlords cannot enforce a set end date to their tenancies. Tenants are in theory now allowed to stay as long as they like, and can give their landlords just two months' notice if they want to move out.
Rent Hikes
Landlords will be banned from hiking rent more than once a year, and must give tenants at least two months' notice of any increases. The new law gives tenants the power to challenge any proposed rent increases that are above the current market rate. The legislation makes it easier for tenants to take landlords to a tribunal. The First Tier Tribunal (FTT) will not be allowed to suggest a higher rate than the one proposed by a landlord, and it will be given the power to defer rent hikes by two months in case of "hardship".
Bidding Wars
The government is moving to crack down on bidding wars between prospective tenants by forcing landlords and estate agents to publish a required rent for their property. Landlords and agents will be banned from "asking for, encouraging, or accepting" any bids which go above this recommended price. If landlords fail to advertise a required rent, publish a price range instead of a fixed rate, or "act in any way" that encourages bidders to pay more than the stated price, they can face sanctions.
Advance Rent
Labour is using the new law to crack down on advance rent payments, with the government banning landlords from asking for rent in advance before a tenancy agreement has been signed. Once the deal is signed, landlords can only ask for one month of rent in advance if the tenant is paying monthly, and 28 days of rent if they are not paying monthly. The law also includes tighter restrictions on the size of deposit a landlord can charge. Landlords can only charge a deposit equivalent to up to five weeks of rent if the total yearly rent is less than £50,000, or up to six weeks' rent if the total yearly bill exceeds this figure. The new law also blocks landlords from asking tenants to pay rent during the "pre-tenancy period," which spans the time between the rental agreement being signed and the start date of the tenancy. Landlords who break any of the new rules set out in the act can be fined up to £7,000 for a minor offence, and up to £40,000 for serious or repeated breaches.
Landlords Calling It a Day?
Law firm Thackray Williams say they are dealing with a wave of last-minute instructions from landlords looking to sell their portfolios ahead of the Renters' Rights Act coming into force. The firm, which operates across London and Kent, says their litigation team has been instructed to seek possession by landlords wishing to sell their entire buy-to-let portfolios, as well as last-minute Section 21 'no fault' eviction notices for both flats and houses. Mustafa Sidki, Contentious Construction Litigation Partner, said: "Our clients are all saying the same thing: the new liabilities and reduced flexibility being introduced by The Renters' Rights Act 2025 from 1 May is the final straw in making their property investments no longer commercially or practically viable, particularly in a challenging economic climate and with other changes also in the pipeline. Many portfolios are no longer commercially viable due to landlords losing the ability to deduct full mortgage interest from rental income (under Section 24 of the Finance Act) and the introduction of an additional 2% tax on income from property by Rachel Reeves in her November 2025 budget."
