Competence under construction: The Industry Competence Committee blueprint for safer buildings and smarter dutyholders

Over a year after its introduction to parliament in September 2024, the highly anticipated Renters' Rights Act 2025 (the Act) has received Royal Assent and became law on 27 October 2025.

The Act represents a significant change in the way the private rental market operates in England, introducing sweeping changes aimed at strengthening tenant protections. Landlords will be subjected to greater regulation and constraints in the way that they operate private rented assets, and can in turn face tough sanctions and criminal liability for non-compliance.

It should be noted that, whilst having received Royal Assent, the Act will not come into force immediately. Government has indicated it will outline how the reforms will be rolled out in the coming weeks.

Here we highlight the key provisions of the Act and explore the potential impact on stakeholders across the rental market.

Application

The Act applies to private rented sector landlords generally, including private registered providers of social housing, supported accommodation and landlords providing temporary accommodation to homeless households on behalf of local authorities. The Act does not apply to local authority secure tenancies. The position is more complex regarding Purpose Built Student Accommodation (PBSA) providers and landlords letting to full time students, as considered below.

Key features

The Act has axed section 21 evictions for new and existing tenants, meaning landlords will need to use one of the (now expanded) grounds under section 8 of the 1988 Act to recover possession (more on that below).

PBSA is exempt from the new rules, meaning PBSA providers can offer new fixed-term tenancies to students aligned with the academic year, provided they have registered with a government approved code (current approved codes include the ANUK/Unipol and UUK codes, but more can be authorised by future regulations). Existing PBSA tenancies will, however, convert to periodic tenancies under the Act, along with all other ASTs. However, PBSA landlords can use the new ground 4A (as described below).

Lettings of non-PBSA student accommodation will be periodic tenancies, whether granted before or after the Act comes into force. However, landlords of non-PBSA student accommodation will be able to rely on a new ground 4A to regain possession at the end of an academic year, provided the property is re-let to a new student or group of students in line with the academic year. To rely on this ground, landlords must give tenants a written statement of their intention to do so before entering into the tenancy. For existing student tenants under assured tenancies, this requirement is modified: landlords must issue the written notice of intention within one month of the new rules coming into effect.

Practical impacts

With landlords needing to prove the requisite circumstances to evict tenants under section 8 grounds and tenants' ability to challenge rent increases and other aspects of landlords' non-compliance, there is concern that the courts will not be able to cope with the projected increase in claims arising following implementation of the Act. Indeed, whilst the Act was introduced by the previous government, there was reluctance to proceed until it was satisfied the courts had the necessary processes in place to deal with claims under the Act. It remains to be seen how much additional resource will be needed to tackle this issue.

The overarching aim of the Act is to provide tenants with stronger legal protections, improved housing conditions and fairer treatment. Tenants will benefit from greater flexibility to end tenancies when needed, including when landlords fail to meet their obligations under the tenancy, and a ban on rental bidding will shield tenants from inflated prices in the rental market.

Many of the reforms introduced under the Act are expected to increase costs and reduce flexibility for landlords. The abolition of fixed term tenancies and section 21 evictions, combined with a blanket ban on rental binding and more limited possession grounds, will make it more difficult for landlords to evict tenants and control rents. Additional reforms, such as the requirement to comply with DHS standards and fees associated with the Private Rented Sector database registration, are likely to add to increased running costs for landlords. Landlords will also be subject to new sanctions and potentially large financial penalties for non-compliance.

Whilst it is widely agreed that the reforms will give greater protection for tenants, there remain significant concerns that the reforms could lead to an increase in individual buy-to-let landlords exiting the market. This could lead to a reduction in supply in rental properties and, ultimately, increased rental prices for tenants, thereby having an adverse impact on the rental market and ultimately undermining the Act's objectives.

For investors, the changes bring greater operational complexity. The loss of fixed term tenancies and the ability for tenants to end tenancies on two months' notice could affect staggered lease-ends and lead to increased void periods. Furthermore, the tenant's ability to challenge increases in rent could lead to delays in cyclical rent uplifts and greater uncertainty around income, which could affect rental growth in the short term, at least.

The Act also creates new challenges for lenders. The abolition of section 21 evictions could result in slower recovery on enforcement and a longer period to re-gain possession of a property. In addition, the introduction of stricter compliance requirements may lead to increased instances of borrower non-compliance, potentially resulting in financial penalties or prosecution, while the tenant's ability to challenge rent increases could tighten the borrower's profit margins. Combined with the rising costs of compliance, this could impact a borrower's ability to service their debt, thereby increasing default risk.

Comment

Proactive engagement with the reforms will be key for landlords to ensure compliance and avoid sanctions or financial penalties. To prepare, landlords should review their existing tenancy agreements and update them in line with the new requirements, ensure that regular inspections are carried out on their properties to ensure they meet the new DHS, register with the relevant schemes, and seek legal or professional advice where needed.