The Renters’ Rights Act Is Here: What Every Property Investor Needs to Know

The Renters' Rights Act Is Here: What Every Property Investor Needs to Know

The Renters' Rights Act came into force on 1 May 2026 — the biggest change to England's private rented sector since the Housing Act 1988. For property investors, it introduces new obligations that will shape how rental portfolios are managed for years to come. Here's what changed and how it affects your investment strategy.

Key Takeaways

• Section 21 Abolished: Landlords can no longer issue no-fault evictions — all possession claims must now go through Section 8 with a valid legal ground.
   
• Rolling Periodic Tenancies: Fixed-term assured shorthold tenancies are gone, replaced by open-ended periodic contracts that tenants can leave with two months' notice.
   
• Stricter Rent Rules: Increases are limited to once per year via a formal Section 13 notice, and bidding wars on rental properties are now illegal.
   
• New-Build Advantage: Purpose-built apartments already meet the incoming Decent Homes Standard, giving investors lower compliance risk and fewer retrofit costs.

1. What’s Changing and When?

Here's a quick overview of what changed on 1 May 2026 under Phase 1 of the Renters' Rights Act:

2. Section 21 Is Gone — How Evictions Work Now

The headline change: Section 21 no-fault evictions have been abolished. Landlords can no longer ask a tenant to leave simply because a fixed term has ended. Every possession claim must now go through Section 8 of the Housing Act 1988, citing a specific legal ground.

The main grounds available include wanting to sell the property, moving in yourself or a close family member, serious rent arrears (now set at three months, up from two), and antisocial behaviour. Landlords must give a minimum of four months' written notice in most cases, and some grounds — including the intention to sell — cannot be used within the first 12 months of a tenancy.

For investors, this means tenant selection and professional property management become even more important. The days of using a Section 21 as a fallback are over, so getting the tenancy right from the start matters more than ever.

3. Fixed-Term Tenancies Are Replaced by Rolling Periodic

Assured shorthold tenancies with fixed terms — the standard six- or twelve-month contracts most landlords are used to — no longer exist for new tenancies. Every private tenancy is now a rolling periodic contract from day one. Existing fixed-term ASTs will automatically convert to periodic tenancies once their current term expires.

Under the new structure, tenants can end their tenancy at any point by giving two months' notice. Landlords cannot impose a minimum stay, though as noted above, the 12-month restriction on certain Section 8 grounds gives some practical protection against very short tenancies.

For investors, this changes how you forecast void periods and income. The upside is that good tenants in well-maintained properties have less reason to leave — there is no fixed term expiring that prompts them to shop around. The downside is that you cannot lock a tenant into a 12-month contract, so your property needs to remain competitive in the local rental market at all times. Understanding rental yields in key UK cities can help you benchmark.

4. The Mortgage Rate Spike and What It Means for Cash Buyers

The Act introduces several changes to how rent is set and increased. Landlords can now only raise rent once every 12 months, using the formal Section 13 process and the new Form 4A. You must give tenants at least two months' written notice before any increase takes effect, and the proposed rent must reflect the open market rate for the property.

Rent review clauses written into tenancy agreements are no longer enforceable. Even if your contract contains one, you must use the Section 13 process. Tenants can challenge any proposed increase at the First-tier Tribunal free of charge, where the tribunal will assess whether the new rent reflects market value.

Beyond increases, two other changes are worth noting. Bidding wars are now illegal — landlords cannot accept offers above the advertised rent. And rent cannot be collected before a tenancy agreement has been signed, which removes the practice of taking payment to secure a property ahead of contract.

Rental periods are also capped at one month, meaning landlords cannot demand quarterly or six-monthly rent in advance. Our UK area guides include current rental data across major cities.

Quick FAQ:

    Q: Can I still increase rent to match the market?
    A: Yes — the Act does not cap rent levels, it controls the process and frequency. If your proposed increase reflects the genuine open market rate, a tribunal challenge is unlikely to succeed. The key is documenting comparable local rents to support your figure.

5. Tenant Protections — Pets, Discrimination and Compliance

Several new tenant protections are now in effect. Blanket bans on pets in tenancy agreements are no longer enforceable. Tenants have the right to request a pet and landlords can only refuse if there is a reasonable justification — such as the building's lease prohibiting animals. Landlords can require tenants to take out pet damage insurance.

Discrimination against prospective tenants who receive housing benefits or who have children is now explicitly prohibited. Landlords and letting agents cannot advertise properties as "no DSS" or "no children," and cannot refuse a tenancy on these grounds alone.

There is also a new documentation requirement. Landlords must provide all tenants with a written statement of key tenancy terms before the tenancy begins. For existing tenancies, the Renters' Rights Act Information Sheet must be sent by 31 May 2026. Failure to comply can result in a fine of up to £7,000.

Quick FAQ:

    Q: Do I have to accept every pet request?
    A: No. Landlords can refuse if there is a reasonable ground — for example, if the property's head lease prohibits pets, or if the property is unsuitable for a large animal. However, a blanket "no pets" clause in the tenancy agreement is no longer valid. Landlords can require the tenant to take out pet damage insurance.

6. What's Still Coming — The Landlord Database, Ombudsman and Decent Homes

Phase 1 of the Act is now live, but further changes are being rolled out in stages. Phase 2, expected in late 2026, will introduce a Private Rented Sector Landlord Database (PRSD) — a national register that all private landlords will be required to join and pay an annual fee. A PRS Ombudsman will also launch, giving tenants an independent dispute resolution service outside of the courts.

Phase 3, expected from 2028 onward, will extend the Decent Homes Standard to the private rented sector. This standard — which has applied to social housing since 2001 — sets minimum requirements for property condition, repair, thermal comfort and facilities. Local authorities will have the power to issue fines of up to £7,000 for non-compliance.

For investors thinking long-term, these later phases are worth planning for now. Properties that already meet modern building standards will face minimal disruption, while older stock may require investment to reach compliance.

7. What This Means for New-Build Investors

Here is where the picture gets more positive. If you invest in new-build apartments — particularly purpose-built developments with professional management — you are already well positioned under the new framework.

New-build properties are constructed to current Building Regulations, which means they meet or exceed the Decent Homes Standard that will apply to the private rented sector from 2028. There are no retrofit costs, no compliance surprises, and no risk of falling below the minimum threshold that will apply to older housing stock.

Professional property management companies are already adapting their processes to handle the new Section 8 grounds, Section 13 rent reviews, and tenant documentation requirements. For investors who use a managed service, the operational burden of the Renters' Rights Act is largely handled on your behalf.

In a market where 46.7% of homes that left agents' books in April were withdrawn unsold and mortgage rates sit above 5.6%, new-build rental investments with professional management offer a level of regulatory certainty that the second-hand market simply cannot match.

How Rothmore Can Help You Navigate the Renters' Rights Act

The new Act adds real complexity for landlords managing properties themselves — from issuing correct Section 13 notices to meeting compliance deadlines with fines of up to £7,00

Rothmore handles the entire process: tenant sourcing, furniture packs, property management, rent collection and ongoing compliance support. Every development we offer is new-build, meaning your property already meets the Decent Homes Standard. The Renters' Rights Act becomes something your management team handles — not something that keeps you up at night.

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