The recent passing of the Renters’ Rights Act marks the most significant change in the English property market in decades. Although this outcome was anticipated for several years, it is now important to take a step back and reevaluate your approach. Let’s examine the new Renters Rights Act and the practical advice for landlords.
The intention behind the Act is clearly evident: to make renting fairer for tenants and to ensure that rogue landlords have nowhere to hide. While the headlines suggest a dramatic change, the reality for most landlords is more nuanced. Day-to-day relationships with tenants may not differ significantly unless disagreements arise, but staying informed is now more critical than ever.
Landlords are already grappling with numerous changes, and being a landlord can sometimes feel onerous. For those reasons, many of our clients are choosing to vacate the market, feeling that successive governments are stacked against them. With restrictions on mortgage tax relief, the licensing of landlords across numerous councils, and upcoming Making Tax Digital (MTD) regulations, the sector has become increasingly challenging to navigate.
However, it does not have to be that way. In a market now marked by undersupply, positioning yourself effectively is key. The answer is to stay on top of changes, keep an eye on the long-term goal, and ensure you understand the figures. Consider working with professionals who have a deep understanding of the tax system and can provide valuable insights into your rental business.
Key Provisions of the Renters’ Rights Act
These changes are part of a broader intention to make renting more secure, fair, and accountable. Many of these reforms have been long anticipated, so they are not entirely surprising to experienced landlords.
However, here’s a concise overview of the changes landlords need to know:
- Ban on No-Fault (Section 21) Evictions – Landlords can no longer evict tenants without cause, shifting the balance of power and increasing the need for careful dispute resolution.
- Restrictions on Rent Increases and Bidding Wars – Rent review clauses will be heavily regulated, with landlords only able to raise rent once per year, ending in-tenancy bidding wars.
- Tenants’ Right to Pets – Blanket bans on pets are no longer allowed, reflecting changing tenant needs and societal trends.
- Fair Access for Tenants With Children or on Benefits – Landlords can no longer exclude these groups, promoting equal housing opportunities.
- Awaab’s Law in the Private Rented Sector – Timelines for addressing serious hazards such as mould and damp are now strict, with penalties for non-compliance.
- Private Rented Sector Database – A central register of landlords aims to increase transparency and ensure bad actors can be identified by councils and tenants alike.
For more detailed information, please refer to our previous blog here.
Practical Advice for Landlords in a Changing Market
If you are still a landlord, the key is to adapt and thrive. Here’s how to navigate the new landscape effectively:
- Be a Good Landlord – Ensure your property meets all regulatory standards and provides a safe, well-maintained home. Compliance is now essential not just legally, but to avoid disputes and fines.
- Vet Tenants Thoroughly – When taking on new tenants, ensure references are impeccable. Once tenants are in under the new legislation, they are likely to stay longer, so due diligence upfront is critical.
- Secure the Best Tenants – Take the time to find reliable tenants. The quality of tenants now has a bigger impact than ever, given the restrictions on evictions and rent increases. Use a reputable agent and maintain a good working relationship with them.
- Stay on Top of Legislation – Changes such as this Act and upcoming MTD rules require vigilance. Keep informed to safeguard your investment and avoid unintended breaches.
- Manage Cashflow and Build Buffers – Maintain a financial buffer to cover empty periods without compromising standards. What’s also important is that you build in regular outlays for maintenance and upgrades in your cash flow projections. We recommend starting with a simple cash flow forecast for your rental business.
Looking Ahead
While some landlords feel squeezed by the regulatory environment, those who remain have a significant opportunity.
The undersupply in the market means good landlords can attract and retain high-quality tenants, but success requires proactive management. The reforms are designed to protect tenants, but they also reward professional, attentive landlords who adapt to the new rules.
Ultimately, the Renters’ Rights Act is part of a broader trend of increasing accountability and fairness in the rental sector. For landlords, it is a reminder that quality, compliance, and careful tenant selection are more important than ever.
By focusing on good practice, staying informed, and managing your properties effectively, you can continue to succeed even in a challenging regulatory environment.
We work closely with many landlords and if you are not yet working with us see how we offer tax support to landlords.