The Renters’ Rights Act: turning change into advantage
The private rental sector is entering a period of unprecedented change. For estate agents, the Renters’ Rights Act 2025 taking effect from May is not just another piece of legislation – it will reshape how you advise landlords, manage tenancies and maintain compliance. Mustafa Sidki of the real estate team at Thackray Williams explains how the next few months are crucial to prepare clients and safeguard your agency’s reputation.
The financial and legal backdrop
Recent tax changes have intensified pressure on landlords. With the November Budget introducing an additional 2% property income tax, creating new bands of 22%, 42%, and 47% from 2027, on top of the previous restrictions on mortgage interest relief, many landlords are questioning the viability of their portfolios.
However, there is a real deadline to any decisions about reshaping portfolios. The implementation of the Renters’ Rights Act (the Act) on 1 May means landlords who want to divest stock should act now – because once the Act comes into force, recovering possession is going to be much more challenging,
This is the time for agents to take a proactive role in guiding landlords through strategic decisions. Whether it’s consolidating properties, restructuring ownership models, or disposing of underperforming assets, early action will help clients avoid being locked into arrangements that limit their options once the new rules take effect.
Key dates – and what they mean for your clients
The Act will roll out in three phases, starting in May 2026. The first phase abolishes Section 21 notices, ends Assured Shorthold Tenancies (ASTs), and introduces Periodic Assured Tenancies (PATs). It also brings rent increase limits, anti-discrimination measures, and a right for tenants to request pets.
From May 2026, all ASTs will automatically convert to PATs. Fixed terms and break clauses will disappear, leaving rolling tenancies as the norm. Compliance documents and deposit registrations will remain valid, but contractual clauses tied to fixed terms will no longer apply.
Later phases will introduce a national landlord database, an ombudsman scheme, and extend the Decent Homes Standard to the private rental sector.
Estate agents should start reviewing tenancy agreements now and ensure landlords understand these changes.
The last window for Section 21 Notices
For landlords who want to regain possession without fault, time is short. Section 21 notices served before 1 May 2026 will remain valid if court proceedings begin by 31 July 2026 or before the notice expires. This transitional period is a vital opportunity for agents to guide landlords through the process, ensuring they act promptly and avoid being caught by the new restrictions that will significantly limit flexibility.
To ensure validity, landlords must comply with energy performance, gas safety, and deposit protection rules, provide the latest “How to Rent” guide, and avoid retaliatory eviction breaches. Agents should audit compliance documents thoroughly and advise on correct service procedures to prevent costly delays and protect landlords from unnecessary disputes under the incoming regime.
Why possession becomes more complicated after May 2026
Once the Act takes effect, landlords will rely solely on Section 8 grounds for possession. These are narrower and often discretionary, making recovery slower and less predictable. Fixed-term clauses will vanish, break clauses will lose effect, and rent reviews will be restricted to one increase per year under the statutory process. Pet bans will be prohibited unless refusal is reasonable, and rent periods will standardise to monthly payments, creating a more rigid framework that limits flexibility for property owners.
For estate agents, this means recalibrating tenancy agreements and managing client expectations carefully. Longer possession timelines and potential disputes could affect cash flow and property planning, so proactive communication and early strategic advice are essential to maintain trust and minimise disruption.
New rules that change the game
Grounds for possession under Schedule 2 of the Housing Act 1988 will be amended, with extended notice periods. Selling a property will require four months’ notice, and court delays could stretch possession timelines to nine months or more, creating significant uncertainty for landlords and agents alike. Critically, there is no mandatory ground for repeated serious arrears beyond Ground 8, which demands three months’ arrears and carries a four-week notice period, leaving landlords exposed to prolonged disputes.
This creates a heightened risk profile for landlords managing tenants with poor payment histories. Advisers should factor these timelines into strategic planning and consider alternative dispute resolution options to mitigate prolonged litigation, while also preparing clients for the financial impact of extended vacancy periods and legal costs.
Acting early to protect landlords’ interests
The most effective way to support landlords is to act early. Encourage them to serve Section 21 notices where appropriate, using correct forms and service methods, and keep meticulous records of proof and deadlines. Continue rent demands until possession is enforced to maintain income flow. Accelerated possession remains available for Section 21 claims, but only if deposit rules have been met and compliance is fully documented.
Agents should ensure landlords understand these nuances and maintain strict adherence to regulations to avoid procedural challenges, costly delays, and reputational risks that could undermine confidence in your agency’s expertise.
Renters’ Rights – an opportunity to strengthen your agency
The Renters’ Rights Act is more than a compliance hurdle – it is a catalyst for strategic change. Estate agents should position themselves as trusted advisers, guiding landlords through portfolio reviews, risk assessments, and long-term planning. This includes considering exit strategies for underperforming assets, modelling the impact of PATs and rent controls, and preparing for a regulatory environment that prioritises tenant rights.
With delay being costly, agents who anticipate change and help landlords adapt early will strengthen client relationships and protect their own business. By taking a proactive approach now, you can ensure your agency remains a vital partner in a market where legislative reform is rewriting the rules of property investment.
Meet the expert: Mustafa Sidki is a partner at Thackray Williams, a leading Southeast law firm, where he specialises in litigation and dispute resolution. Additionally, Mustafa handles commercial disputes involving breach of contract and shareholder disagreements.
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