Renters’ Rights Act 2025

In February 2024 we wrote about the Renters (Reform) Bill which has been proposed by the former Conservative Government in 2022, and which had been shelved for a while to allow the Government to deal with the backlog in the Courts. Here we are nearly 2 years on, and the Renters Reform Act 2025 has now received Royal Assent and is looking likely to come into force on 1 May 2026.

Here are a reminder of the main provisions and changes and an update on what has actually become law:

1. Removes the usual contractual term of a tenancy agreement, moving to a structure where all assured tenancies are “periodic”

Assured shorthold tenancies are now replaced by periodic tenancies, with rent periods being monthly but can be more frequently. Therefore, the law will mean that tenancies will not be for a fixed term e.g. a year or six months, and if a contract does try to incorporate a term, then it won’t be enforceable. The tenancy will typically just be a rolling monthly contract.
This is likely to provide far less certainty for both landlord and tenants who had previously enjoyed the certainty of knowing how long a tenant might be in the property.

2. Removal of section 21 notice and the change to the “grounds” on which landlords can recover their properties

The new Act removes the “no fault” reason for gaining possession of a property, which was utilised by serving a section 21 notice. However, it does expand on the current “grounds” on which a landlord can rely to gain possession. This includes a new ground if a landlord wishes to sell or move into the property themselves. This will be a huge relief to some who often used a section 21 notice because of this reason.

However, the most common ground we have seen for possession proceedings historically has been rent arrears and there are significant changes coming in the Act. Whereas previously if a tenant was in 2 months arrears, a section 8 notice could be served and 14 days’ notice given, the new Act will require 3 months of arrears before a mandatory order is given, and 28 days’ notice will be required.

This will impact landlords significantly as there are already long delays with getting a possession hearing once a claim is issued. Many tenants often refuse to pay any rent during the Court process in the knowledge that most landlords think it is pointless to pursue them after they have left the property, so now with these changes they are likely to get another “free” month.

The new Act does promise to try make it easier for landlords to gain possession if a tenant is being anti-social. However, the difficulties in evidencing such a claim remain, and it is likely that landlords will still try to use some of the other grounds to gain possession rather than having to prove anti-social behaviour has taken place.

3. New changes to rules on increasing rents

The Government is introducing these changes as they believe some landlords try to encourage their tenants to move out voluntarily by telling them they are increasing the rent by an excessive amount which they know the tenant will be unable to afford. The new rules will establish a revised section 13 procedure and limit rent increases to only one a year. Landlords will need to give a notice detailing the proposed rent increase at least 2 months before it comes into effect.

4. The right to request a pet

Currently renters are often told that they are not allowed to have a pet because landlords are concerned about the damage which may be caused by the animal(s). However, the new Act means that the landlord must consider and not unreasonably refuse a request for a pet. For a time, it did look like the Act might allow for the landlord to require the tenant to take out pet insurance to cover any damage to their property. However, this has not become part of the law and therefore the Landlord will need to use the tenant’s deposit to cover this (at a max equivalent of 5 weeks rent).

Again, it will be interesting to see in practice how this will be policed. What is considered reasonable refusal? On what basis are landlords allowed to refuse? It remains to be seen what guidance will be given on this. If you’re concerned about what the rules now allow then we will be happy to help you with this, or your letting agent should be well versed in how to approach this.

Some of the steps which were proposed have been pushed back to the second phase of implementation, which are proposed to be at the latter end of 2026, including establishing a PRS Landlord Ombudsman.

Key steps for landlords:

• Ensure your tenancy agreements are compliant and have removed any reference to a fixed term.
• Ensure you understand what the grounds are on which you can gain possession if you need to rely on this.
• Undertake good references and due diligence on your tenants. This is more important than ever with greater uncertainty about how the grounds will be applied if you do need to go to Court to evict your tenant.
• Consider whether you need to get landlords insurance or ensure you are otherwise financially sound to cover any rental voids if your tenant does decide to vacate quickly without the fixed periods.
• Consider whether the Court process is a financially viable one or settlement is a more appropriate option. If challenges are made to the grounds relied upon then we will likely see more trials of issues in the Courts which often take months and significant legal costs to deal with. Landlords may choose to consider whether a financial incentive early on may be the more appropriate avenue.

If you would like more information about a Possession Claim or wish to start a claim under the old regime, then please do not hesitate to contact Claire Darby (cdarby@pearsonhards.co.uk) or Christine Salama (csalama@pearsonhards.co.uk) or telephone 0208 949 9500.