There’s no denying that the Renters’ Rights Act is the biggest shake-up to the buy to let market in decades. But, while many buy to let landlords are understandably focussed on the challenges that the Renters’ Rights Act brings, could the Act ultimately lead to a more professional, better-regarded and less crowded rental market?
Since the legislation came into force across England on 1st May 2026, much of the discussion has centred around rising regulation, the abolition of AST’s, tighter rules around possession and the prospect of many landlords leaving the market altogether. The headlines tend to rightly portray the reforms as another blow to private landlords at a time when higher interest rates, tax changes, and increasing compliance requirements have already squeezed buy to let investment returns.
From our perspective, there is little doubt that the new rules will create further challenges for some buy to let landlords, particularly those with smaller portfolios or those with a more ‘hands-off’ approach to managing their properties. Major regulatory changes, however, often have unintended consequences. While the Renters’ Rights Act was primarily designed to strengthen protections for tenants, some of its longer-term effects could actually benefit landlords who remain in the market.
From reduced competition and stronger rental demand to a more professional sector and potentially improved public perception of landlords – could there be reasons why the Act may not be quite as one-sided as the headlines suggest – or are we simply trying to find the silver-lining?
Why Many Landlords Are Concerned
Since the Renters’ Rights Bill was first introduced to Parliament in September 2024, the proposals had rightly caused some concern among private landlords, for several main reasons.
Removal of “No-Fault” Evictions
Historically, buy to let landlords have valued Section 21 as it provided a reliable route to regain possession without having to prove tenant fault. Many landlords see the removal of Section 21 no-fault evictions as reducing their flexibility and increasing risk, especially where their circumstances change unexpectedly or to deal with a tenancy that has become difficult but does not meet a specific statutory ground for possession.
Greater Administration and Compliance
The Renters’ Rights Act introduces several additional obligations for landlords and their agents and property managers. These include record keeping, responding to tenant requests, understanding new procedures, and ensuring ongoing compliance all require time and resources. Failure to adhere to some of the new obligations will result in hefty fines. Smaller landlords managing just one or two properties themselves are likely to feel the burden most acutely.
Concerns Around Possession
Despite the Act introducing and strengthening a number of possession grounds, landlords are concerned about how straightforward it will be to recover a property. Landlords are less concerned about whether legal grounds exist, and more concerned about the time, cost and uncertainty involved in relying on the court processes when possession is required.
Rent Review Uncertainty
Prior to the Renters’ Rights Act coming in to force, landlords had flexibility to respond to market conditions for rent reviews and AST renewals. The Act now introduces a more structured approach to rent increases, which some landlords worry that disputes over rent levels could become more common, especially in fast-moving rental markets where rents can change significantly within a relatively short period.
Tribunal Backlogs
A fair recurring concern from landlords is whether the tribunal system will have sufficient capacity to deal with a significant increase in cases. With a larger number of tenants challenging rent increases or other aspects of their tenancies, delays will likely create uncertainty for both landlords and tenants until a case is determined. Even where a landlord ultimately succeeds in a tribunal case, long waiting times can be frustrating and costly, particularly as rent increases will not be backdated.
Increased Regulation Generally
Landlords are generally seeing the Renters’ Rights Act as part of a broader trend towards greater regulation of the private rented sector. Together with the previous tax changes to properties held in a personal name, licensing schemes, energy efficiency requirements and other compliance obligations, there are fair concerns that the cumulative effect makes residential property investment far less attractive than it once was.
These concerns are all valid and shouldn’t be dismissed, however we consider whether there is another side to the story. Major reforms like this often create winners and losers, and for landlords who are able to adapt successfully, could some of the longer-term consequences of the Renters’ Rights Act be more positive than they first appeared?
The End of No-Fault Evictions May Not Affect Most Professional Landlords
Landlords had enjoyed the flexibility that Section 21 brought to the private rental market, but, more often than not, it was used as a ‘backstop’ for situations where a landlord wanted to end a tenancy but didn’t have a clear fault-based reason. With Section 21 no-fault evictions now abolished, landlords will need to rely on specific grounds to seek possession. That said, the reality is that most professional buy to let landlords didn’t use Section 21 on an intentionally regular basis to remove good long-standing tenants. The loss of Section 21 for possession following an unsuccessful rent review is a valid concern, and one which we discuss in further detail below.
Most landlords we speak to want good long-standing tenants. They recognise that frequent tenant turnover is expensive and void periods hurt their returns, so landlords were not using Section 21 for no reason. In our experience, the main reasons that landlords relied on no-fault evictions (apart from rent reviews) were:
- Intention to sell the property
- Intention to move in to property, or for close family member to move in to property
- Serious rent arrears
- Persistent rent arrears
- Anti-social behaviour
- Breach of tenancy agreement
- Property damage or neglect
- Where the property requires major works that can’t take place with the tenant in situ
Other, less common, examples include where a tenancy was obtained through false or misleading information provided by the tenant, or where the tenancy is linked to employment and that employment ends.
The good news is that all of these scenarios are reasonable possession grounds under the Renters’ Rights Act, which broadly fall in to four main categories: landlord circumstances, tenant fault, tenancy breaches, and specific housing situations. In theory, therefore, landlords still have a route to possession in the majority of cases (and a route to market rent in the case of rent reviews, which is discussed below).
That said, however, we accept there might be some less common scenarios where landlords relied on Section 21 which they will no longer be able to, for example where the landlord feels the tenancy is no longer working due to communication or relationship break-downs, or where there are minor but persistent breaches such as poor housekeeping or unauthorised occupants. These situations may now be more challenging to overcome where Section 21 would have otherwise provided the landlord with alternative route where proving a fault-based case might have been difficult or disproportionate.
Removal of AST’s Create New Challenges For Landlords
There is no doubt the removal of Assured Shorthold Tenancies (AST’s) and the move towards periodic tenancies represents one of the biggest practical changes for landlords. Landlords generally prefer long-term tenants and value predictability to give them comfort when committing to buy to let mortgages and property maintenance in the knowledge that a tenant will be there for at least a year.
With periodic tenancies, landlords now have far less certainty over how long a tenant is likely to stay, with tenants only required to give two months’ notice at any time. This presents new challenges for landlords with the potential for more void risk, more frequent re-letting, and higher turnover.
With that said, good, well-maintained properties in good locations are likely to re-let quickly and, given that new tenants will also have the ability to leave existing tenancies with two-months’ notice, the lettings market may be more responsive and dynamic. Furthermore, long-term tenants are still likely to stay if the property is well managed and rents are fair.
As a result of these changes, we expect to see tenancy set-up and costs to be a more significant focus for landlords and letting agents. Referencing and tenant criteria (which should be robust but avoid discrimination) are likely to be tightened to filter out unsuitable tenants. Administration, inventory and schedule of condition checks may see modernisation or new technology to reduce costs as a result of higher turnover and more frequent lettings. Similarly, more landlords may opt for unfurnished properties to reduce furniture replacement costs due to the higher turnover. Letting agent fees are also adapting to respond to the new changes.
Student Lets Could See The Biggest Impact
As well as all the above, student lettings may be exposed to higher voids due to student tenants seeking to align their tenancy to academic year, knowing that they are unlikely to stay during the summer months. If students are no longer tied to 12-month AST’s, they are likely to give two-months’ notice prior to the Summer, and end the tenancy after approximately 9 months. If the property is set-up for students, it’s unlikely that the landlord will find a new tenant until the new academic year, and therefore more likely to be exposed to Summer voids. This may result in student landlords seeking higher rents in an attempt to cover a full years’ rent within a 9 month period.
With greater risk of voids and uncertainty, landlords may be more conservative with new investments and, as a result, some areas may see faltering prices for student property investments. Lenders may also take a more conservative approach to underwriting these properties. As always though, high quality accommodation in prime locations is likely to continue to attract strong demand from students.
The Market Will Adapt
Although removal of AST’s is a major concern for landlords in the short-term, we are confident that the resilient landlords in the private rental market will adapt over time, as they always have done. Landlords and agents will put far greater focus on high quality tenant acquisition over simply filling voids, and landlords will be keen to retain good tenants. As a result, property management and maintenance are likely to improve across the sector, which won’t concern most good professional buy to let landlords who take good care of their properties anyway. Some of the heat and significant price growth is likely to come out of the market as landlords adapt and become more selective with their acquisitions.
Almost every significant reform of the private rented sector has initially been viewed with concern, whether it were licensing schemes, tax changes, EPC proposals, or changes to mortgage regulation or tax. Over time, buy to let landlords, lenders, letting agents, managing agents, and service provides have all adapted to the new norm. The Renters’ Rights Act is likely to follow a similar pattern, albeit integrating with several changes all at the same time, with processes becoming more efficient and best practice becoming more established as the market matures.
Private Rental Sector Reputation
Could the Renters’ Rights Act actually help to improve the reputation of the private rented sector in the long-term?
Buy to let landlords have rarely enjoyed a positive public image. Negative perceptions of landlords date back to well over a century during the late Victorian era and early 20th century, where landlords were often associated with poor housing conditions as well as overcrowding and profiteering.
Then, from the around 1996 to around 2015 the introduction of buy to let mortgages transformed the sector with a buy to let boom. During this period, fuelled by property TV programmes and rising house prices, hundreds of thousands of ordinary homeowners acquired buy to let property, largely as investors rather than traditional experienced landlords. With this boom, however, buy to let investors were blamed with pricing first time buyers out of the market and the same TV programmes that fuelled interest in the sector also highlighted ‘rogue landlords’, doing very little for public perception of the sector.
From 2015 onwards, the market saw a clear political shift and perception deteriorated further. The changing political mood was reflected by a series of Government reforms including the reduction of mortgage interest tax relief, additional stamp duty surcharges on second homes, the Tenant Fees Act 2019, tougher licensing and safety requirements, proposed EPC reforms, and now the introduction of the Renters’ Rights Act.
The reality is that despite the thousands of genuine, professional landlords making positive contributions to the market, there appears to be a general negative perception of the private rented sector, made worse by a small number of unprofessional and short-sighted landlords fuelling tenant mistrust.
The Renters’ Rights Act, however, is designed to raise the standards of the industry. It should raise standards of poor quality property, penalise unscrupulous or unprofessional landlords and potentially begin to rebuild trust in the sector through flexible tenancies, fair market rents, and reducing unfair no-fault evictions.
Whilst there is a general consensus from landlords against the Renters’ Rights Act, many professional progressive landlords were adopting many of these policies anyway. The whole sector should eventually see greater consistency, better standards, and increased professionalism, which can only be a good thing for the landlords who were already operating at these standards.
The Act May Inadvertently Cause Rents To Increase
It’s no secret that some landlords are exiting the sector off the back of the Renters’ Rights Act coming into force due to concerns around reduced flexibility, stricter regulations and more risk. As a result, some landlords are choosing to sell their buy to let properties, and due to the short-term uncertainty that the Renters’ Rights Act has caused, there is less interest by other investors to acquire these properties.
Rental demand was already strong and growing, however reduced supply of rental homes as a result of landlords exiting the sector could lead to a greater supply and demand imbalance. Basic economics therefore would dictate that rents may rise due to demand outstripping supply. Controversially, therefore, there is a possibility that the Renters’ Rights Act may inadvertently cause private rents to increase more than they otherwise might have.
With that said, the new rent review processes and tenant ability to challenge rent increases via the Tribunal is largely untested – at least at any significant scale as we expect to see. How market rent disputes ultimately get determined and how quickly the process and Tribunal resource can adapt remains unclear. The challenge is trying to evaluate how these opposing forces will interact with each other.
More Housing Stock For Owner-Occupiers
As detailed in the previous section, some smaller private landlords (typically with one or two buy to lets) are choosing to exit the market as a result of the Act, and few remaining investors are seeking to take up this stock. There is a unique opportunity, therefore, for owner-occupiers looking for residential mortgages to benefit from some rental stock returning to the sales market.
In particular, ex-rental properties may be most suitable for first-time buyers and downsizers, especially where purchase costs such as Stamp Duty Land Tax can be managed more effectively. This is something that the market has been in short supply of in recent years. In some areas, it is possible that this will lead to some additional stimulation to certain markets and/or improved transaction volumes with properties changing hands rather than remaining held in the private rented sector.
The Biggest Unknown: Rent Reviews and Tribunals
One of the most significant areas of concern for landlords now is around rent increases. Before the Act came into force, if landlords felt that the rent had fallen below market levels they could seek a rent increase upon renewal in the comfort that should negotiations break down they could give notice to end the tenancy and remarket the property. This is no longer allowed and landlords will be required to follow the statutory rent increase process where, if challenged, rents may need to be determined through the tribunal process.
In our experience, however, most professional landlords are not seeking to rip-off good tenants – most are genuinely seeking to achieve the correct market rent, which the statutory process should allow for. Whilst there is much talk about the uncertainty and likely delay of the Tribunal process if challenged, in theory there is at least a route to professional landlords still being able to achieve market rents.
At Adler Green we anticipate that the rent review and Tribunal process will see refinements and clarifications over the coming months because as things stand the process results in major uncertainty for all parties, as well as the Tribunal system already being short of capacity and resource. The industry is likely to see significant volumes of challenges because there is effectively nothing to lose for tenants – at worst they can delay the rent increase by several weeks or months, at best they’ll be successful in their challenge and receive a lower rent increase.
There is likely to be discussion around exactly what the definition of ‘market rent’ is in the context of the Tribunal process, and how the correct market rent is ultimately determined. At the present time it’s too early to see how this will play out, however we anticipate that in time we might see a streamlined process of some sort, a fast track or simplified Tribunal process, standardised area values or rent growth rates used to assist and speed up the review processes.
This will be one of the most important areas to watch over the coming years.
The Landlords Most Likely To Thrive
Despite the understandable concern and trepidation from landlords, many landlords that we are speaking to are still feeling positive about the future, with most professional and portfolio landlords retaining their properties, and some continuing to acquire new investments. We think the landlords most likely to continue to thrive in the forthcoming years are:
- Landlords with well-maintained, energy efficient, properties should transition smoothly due to already meeting new standards.
- Those who hold properties with sensible leverage and healthy rental cover, as well as those with a reasonable positive net cashflow to stomach higher costs.
- Portfolio landlords who can benefit from economies of scale, systems and processes, and resilience against voids that can be diluted across the portfolio.
- Investors with a long-term mindset focussed on growth and stability rather than short-term cash flow.
- Landlords delivering high-quality professional management (either direct or via agents).
- Those who value strong tenant relationships and high tenant satisfaction, with retention as a key focus.
What We Think Will Happen Next
We have already seen some smaller landlords exit the market and, unfortunately, we think this may continue in the short term. However, as detailed in this article, this could leave rental supply more constrained and therefore, together with the added costs to landlords, we may see some rents increasing.
The reality is that the Renters’ Rights Act will require landlords to ‘up their game’, so the likelihood is the sector will generally become more professional. The better operators are already gaining market share, and this is likely to continue. There may still be opportunities for first-time landlords, particularly those who take the time to understand buy to let mortgage requirements before making their first investment, however the learning curve will be steeper and lender underwriting may focus more attention on the investment business plan.
Buy to let mortgages will absolutely remain available, with most lenders already adapting to the new market conditions. Over recent weeks buy to let mortgage rates have begun decreasing (following the stabilisation and gradual fall in swap rates following the conflict in the Middle East). Lenders will continue to ask about landlord experience, and will continue assessing rental affordability using buy to let stress testing.
Conclusion
The Renters’ Rights Act will undoubtedly create winners and losers. However, whilst most of the current discussion focusses on the challenges facing the sector, professional landlords may ultimately benefit from a more mature, higher quality, better regarded and less crowded private rental sector in the long term.
If the sector evolves towards a more professional landlord base, supported by stronger property management, better maintained housing stock and more experienced investors, it could ultimately become a lower-risk lending environment than today’s fragmented market, where standards and management quality vary considerably.
Only time will tell whether these unintended consequences emerge, but the private rented sector is undoubtedly entering a new era.
