Renting Reimagined: What the Renters’ Rights Act 2025 Means for Landlords and Tenants in 2026

From 1 May 2026, the UK's rental landscape will undergo its most significant transformation in decades as the Renters’ Rights Act 2025 begins implementation. Designed to rebalance power between landlords and tenants, this landmark legislation introduces sweeping reforms to how tenancies are structured, how rents are increased, and how tenant rights are protected. Here's what landlords, tenants, and property professionals need to know.

Goodbye Section 21, Hello Periodic Tenancies

One of the headline changes is the abolition of section 21 “no-fault” evictions. For decades, this provision allowed landlords to remove tenants with minimal notice and no stated reason. Its removal means that landlords will now need a valid legal reason to end a tenancy, such as rent arrears or property sale.

In tandem, all Assured Shorthold Tenancies (ASTs) will transition into periodic tenancies. This gives tenants increased flexibility, as they will no longer be tied to fixed terms and can give notice with minimal commitment.

Rent Increases and Bidding Wars

Under the new framework, rent increases will be limited to once every 12 months, enforceable only via Section 13 notices. This limits the risk of sudden or multiple rent hikes, allowing renters greater financial predictability.

At the same time, the Act bans rental bidding wars, where prospective tenants were pressured into offering above the advertised rental price. It also outlaws discrimination against families with children and people on benefits, supporting fairer access to housing.

Enforcement and Penalties

Compliance is critical. Breaches of the new rules can result in civil penalties of up to £7,000 and criminal fines of up to £40,000. With parts of the Act rolling out in phases through late 2026 and beyond—including a new national Private Rented Sector (PRS) database, a formal ombudsman service, and the application of the Decent Homes Standard—landlords must stay up to date.

Wider Legal and Regulatory Developments

Beyond residential lettings, the UK property sector is witnessing additional legislative momentum:

Commercial leases: A draft bill progresses through the Lords to ban upwards-only rent reviews, targeting a 2027/28 implementation. This has sparked debate across the commercial property sector.
Leasehold reform: A major reform bill is expected in early 2026, aiming to make commonhold the default for new flats, cap ground rents, end forfeiture for minor breaches, and simplify lease extensions.
Heat networks: From 27 January 2026, new regulations take effect for landlords providing communal heating and cooling, especially in social housing, ensuring consumer protection and transparency.
Business rates: A consultation is underway (closing 18 February 2026) to introduce a new high-value band for properties over £500,000 and potential adjustments to rate multipliers for retail, hospitality, and leisure sectors.

Market Outlook: Supply, Demand, and National Trends

Tenant demand remains high as UK rents reached record levels in late 2025, driven by landlord exits—many prompted by early section 21 notices ahead of the new legislation. Rents rose 2% nationally, with London rising just 1.6%, slightly improving affordability.

Forecasters anticipate 2–2.5% rental growth in 2026, suggesting a stabilisation in supply and demand that could usher in a calmer period for the buy-to-let sector.

Looking Ahead: Energy, Compliance, and Institutional Investment

Landlords must also navigate longer-term changes:

Energy performance: EPC C minimum standards are proposed for 2028 (new tenancies) and 2030 (existing tenancies). While not yet law, landlords are encouraged to act early and explore grant options.
Build-to-Rent (BTR) and student housing providers are preparing for tenancy updates and awaiting final wording on exemptions and information requirements.
Advocacy groups like Generation Rent remain active, pushing for further regulation and climate-conscious measures under the proposed Warm Homes Plan.

Final Thoughts

The Renters’ Rights Act 2025 represents a seismic shift in UK landlord-tenant relations. While some landlords may feel the strain of increased compliance and reduced flexibility, others view it as an opportunity to professionalise their operations and align with a more sustainable and fair rental market. With strong demand and steady rental yields forecasted, those who adapt early stand to benefit.

Stay informed, take proactive steps, and ensure you're legally compliant to thrive in the next phase of UK property rentals.