The article has been reproduced with kind permission.
Enactment of the first stage of the Renters’ Rights Act on May 1, 2026, will see the biggest power shift between residential landlords and their tenants for a generation.
Although much attention has focused on the abolition of no-fault evictions, the legislative changes and their repercussions go far wider.
From next May, renters will be able to end a tenancy by giving two months’ notice at any point, so landlords may have to find replacements every few months. This could create difficulties for landlords who are using rental income to fund mortgage repayments. The reform may stop the practice of letting agents demanding landlords pay many months’ commission upfront.
Landlords will be unable to accept a rental bid higher than the advertised rent. Neither will they be allowed to refuse to grant a tenancy solely because the tenant has children, or because the rent will be paid through benefits.
Landlords might respond to these changes by asking for higher initial rents. Opening the rental market to a wider range of tenants may result in increases in the cost of landlord insurance to cover property damage, or the risk of non-payment of rent.
Tenants are likely to use tribunals more to challenge proposed rent increases, because under the legislation rises will be capped at the figure the landlord proposes and backdated to the determination date. This could overwhelm tribunals, and cause delays.
Although the government has hinted it might create a body to support the tribunal, no timeline exists. Meanwhile, landlords may try to mitigate their income loss by — yet again — proposing higher rents.
The second stage of implementation — expected in late 2026 — will see the introduction of an ombudsman system to adjudicate only tenants’ complaints, as well as a private rental sector register. Landlords will fund both schemes, in addition to continuing to pay for existing measures that apply to their property, such as the selective licensing rules.
It is sadly typical of the one-sided nature of the act that although the government is exploring ways for landlords to request mediation, there is no indication of when the provisions will be introduced.
It seems clear that the legislation’s heavier obligations on landlords may push up rents, especially if smaller landlords quit the market. One way of depressing rents is for the government to launch a significant home-building programme, but that will be much harder to achieve than enacting legislation giving landlords the responsibility for resolving the problems of the residential property market.
Click here to read the article on The Times: Handing more powers to tenants won’t fix the housing market.
For further information, please get in touch with Scott Goldstein, Property disputes expert and Partner in the Litigation, Arbitration & Dispute Resolution department, or alternatively, telephone 02074654300.
