On 1 May 2026, the legal landscape governing how 11 million people in England rent their homes will change, in what many in the property industry are calling a "big bang" moment. The Renters' Rights Act 2025, which received Royal Assent last October under Angela Rayner's stewardship at the Ministry of Housing, passed after years of false starts under successive Conservative governments. For many tenants, it cannot come soon enough. For landlords, the clock is already ticking. So what is changing???
The end of the no-fault eviction
The centrepiece of the Act is the abolition of Section 21, the so-called "no-fault" eviction notice that has allowed landlords to remove tenants without giving a reason. From May, landlords must rely entirely on Section 8 grounds, which require a legally specified reason such as sustained rent arrears or the genuine intention to sell or move back into the property. The notice period for those legitimate grounds has been extended, and eviction for rent arrears will only apply if the tenant is three full months in arrears, a higher threshold than the current standard.
At the same time, fixed-term assured shorthold tenancies (ASTs) will be abolished entirely, replaced by rolling periodic tenancies with no minimum term or end date. Tenants will be able to leave with two months' notice, giving them the flexibility that the current fixed-term framework largely denied them. To protect tenants from being destabilised early in a tenancy, landlords will be barred from using the "selling" or "moving in" grounds for eviction for the first 12 months.
For those who have lived in fear of the annual lease renewal, or who have been handed a Section 21 notice after complaining about mould or disrepair, these are significant protections. Landlords will also be barred from accepting or encouraging offers above the advertised rent, ending the bidding wars that have become a feature of competitive urban markets.
A landlord exodus and its consequences
The Act does not exist in a vacuum. It arrives after years of regulatory and fiscal pressure that have already thinned the private rented sector considerably. Research by TwentyEA shows that in Q1 2025, 15.6 per cent of all new property sales instructions were previously rented homes, up sharply from 9.8 per cent a year earlier, and just 2.9 per cent of those homes were subsequently re-let, suggesting the properties are being permanently removed from the rental market.
Estimates suggest around 93,000 landlords exited in 2025, with a further 110,000 potentially leaving in 2026. The cumulative toll is substantial. Rightmove notes that the total number of homes available to rent is currently 33 per cent lower than it was ten years ago, even as it has risen by 9 per cent year-on-year.
The implications for rent levels are predictable. Average private rents in the UK rose by 3.5 per cent to £1,374 a month in the 12 months to February 2026, according to the Office for National Statistics, though the pace of increase has been gradually slowing. Zoopla forecasts a further 2.5 per cent rise over the remainder of the year, with supply remaining the binding constraint.
The professionalisation of the sector
The departing landlords are not simply disappearing. Limited-company buy-to-let purchases reached record levels in 2025, accounting for 43 per cent of all buy-to-let mortgages, as investors restructured their holdings to avoid the full weight of Section 24 mortgage interest restrictions. Meanwhile, Build-to-Rent, in which institutional funds develop and operate rental housing at scale, continues to absorb some of the slack, though BTR construction in London fell by 11 per cent between Q3 2023 and Q3 2024, raising questions about whether institutional supply can offset what smaller landlords are removing.
The net effect is a sector consolidating upward, with the casual buy-to-let landlord, the individual who bought a second property as a pension supplement, giving way to corporate operators with compliance teams and professional management platforms. For tenants in well-run Build-to-Rent blocks, that may mean better service and greater stability. For those competing for older stock in high-demand cities, the choice may simply be narrower and the rent higher.
What comes next
The May commencement date is only the first phase of a broader programme. A national Private Rented Sector database, which will require mandatory landlord registration, is scheduled for a regional rollout from late 2026, with a full national launch expected in 2027 or 2028. A Private Landlord Ombudsman, which will allow tenants to resolve complaints without going to court, is expected around 2028, and a new Decent Homes Standard for the private sector is not anticipated until after 2035.
Making Tax Digital for income tax is also being extended from April 2026 to landlords earning £50,000 or more annually, adding another layer of administrative obligation to an already pressured cohort.
Members Discussion