Why landlords should not be concerned about The Renters Right Act 2025
Since the publication of the white paper ‘A Fairer Private Rented Sector’ in June 2022 there have been countless blogs, posts and essays on the subject by market commentators, property lawyers and letting agents. At the time, I saw little value in adding my voice to the noise.
However, with the Bill now having passed into law as the Renters’ Rights Act 2025, and with the reforms finally entering the public conversation through mainstream media, it feels the right moment to share my perspective.
I appreciate that many landlords feel frustrated by what seems like yet another round of government intervention. But if we set aside the emotional reaction and look at the practical realities of the changes, there’s not as much to be concerned about as some fear.
The Renters’ Rights Act is a substantial piece of legislation, and I won’t attempt to cover every clause here. Instead, I’ll focus on the key areas that are likely to matter most to our landlord clients.
Abolish section 21 notices.
Landlords have long been accustomed to serving a Section 21 notice at the end of a fixed-term tenancy, with any renewal depending on a fresh negotiation if the tenants wished to remain in the property. Under the new system, tenants will have the right to stay indefinitely, provided they meet their obligations.
In practice, however, this is unlikely to represent a major shift for most professional landlords. Over the twenty years we’ve been operating in Canary Wharf, our renewal rates have consistently been in the 90th percentile — with the only notable exception in 2008, when they dipped to 69%. A good landlord will always want to retain a good tenant, and most tenants prefer the security of continuity. Viewed in that context, the move to open-ended tenancies is far less concerning than some headlines suggest.
Annual rent increases via Section 13 notice
Most of our landlords already review rents on an annual basis, so this represents little change in day-to-day practice. Under the new system, instead of serving a Section 21 notice at the end of a fixed-term tenancy, we will serve a Section 13 notice to propose an annual rent increase and assist with any necessary negotiation.
Tenants have the right to apply to the First-tier Tribunal (FTT) to determine the new rent. In practice, we recommend that the Section 13 notice propose the highest open market rent, accompanied by a without-prejudice email offering a new rent that is higher than the current rent but lower than the figure in the notice. The tenant can accept this offer, creating a valid agreement without incurring the delays of a tribunal. If the tenant does not accept, they may apply to the FTT, which will then consider whether the rent proposed in the notice reflects the open market rate.
Tenants can leave with two months’ notice
Although tenants now have the right to end a tenancy with two months’ notice, in practice this is rarely a concern. From our experience, tenants request early termination only a handful of times each year, usually due to significant personal changes such as a relationship breakdown or a loss of income. In these cases, it is often better to allow the tenant to leave rather than insist they remain. Forcing a tenant to stay in a property they are unhappy with can damage the professional relationship and create ongoing difficulties, whereas an amicable departure preserves goodwill and avoids unnecessary stress for both parties.
N.B. Our pro-rata fee structure also removes any potential awkwardness regarding fee rebates when a tenant leaves early, ensuring a smooth and fair process for landlords.
Landlords cannot sell a property until the tenant has lived there for twelve months
Under the new legislation, a prescribed notice of four months must be served, and the tenant must have lived in the property for a minimum of twelve months, before the landlord can sell. I understand that this may be frustrating for some clients. However, looking on the positive side, properties that are presented at their best — free of a tenant’s personal belongings and general clutter — typically sell faster and often achieve a better price.
I hope this brief essay provides some reassurance to clients who may have concerns about the forthcoming changes due next year. Please do not hesitate to contact me if you would like to discuss any aspect of the Renters’ Rights Act further.