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Introduction
The Renters’ Rights Act 2025 (“RRA”) is a landmark piece of legislation in England that represents the most significant reform of the private rental sector in decades. This article examines the main changes in detail, before briefly assessing the likely impact of these reforms.
Conversion of all assured tenancies to periodic tenancies
With some limited exceptions, since 1997 all new private rented sector (“PRS”) tenancies have been ASTs by default. The Government has estimated that 86% of English PRS tenancies in existence in 2021-2 were ASTs.[1] The RRA converts all ASTs into periodic tenancies, and gives tenants the right to terminate at any point, on two months’ written notice. Landlords will not enjoy a similar right. Under the new law, a tenant may give notice to quit using any written means it wishes, but it does not state where the notice is served. That makes it critical that tenancy agreements list all email addresses and mobile numbers to which notices may be sent, texted, or WhatsApped.
Abolition of “No-Fault” Evictions
This is the centrepiece of the RRA. While the debate is over, it is interesting to note that according to Government’s statistics, in 2021-2, only 4% of all tenancies ended through.[2] Now that they can no longer rely on section 21 notices, landlords will need to use the section 8 procedure to recover possession. That entails serving a notice asserting that one or more statutory ground(s) of possession is made out. Some of these grounds have been expanded and new grounds introduced. However, others have been restricted, most notably ground 8 (rent arrears). Currently, a landlord can serve a section 8 notice where eight weeks’ arrears have accrued. That will increase to 13 weeks, and any unpaid universal credit will not count towards the arrears. Taken with the new anti-discrimination provisions, this could impose a significant additional burden on landlords. Evidence to a parliamentary committee shows that in 2017 one in five claimants are not receiving a full payment within five weeks of making their claim.[3] Mirroring part of the current section 21 regime, in order to serve a section 8 notice landlords will need to have protected their deposits, or registered their property on the PRS database (see below).
Rent Regulation and Bidding Wars
The First Tier Tribunal will continue to hear tenants’ challenges against their landlords’ proposed rent increases, but it will no longer be able to fix rent above the level the landlord proposes. This could become counter-productive as it could prompt landlords to propose higher rent than they would do under the current rules. Similarly, before the tenancy, landlords and agents will have to publish the proposed rent, they will be unable to accept or encourage any bids above that price. Landlords may seek to circumvent these rules by increasing their initial asking price.
Anti-Discrimination Protections
The Act prohibits landlords and letting agents from discriminating against prospective tenants who have children or who are on benefits. However, indirect discrimination against these groups may in some circumstances be justified. Landlords and agents may need to be aware of the defence offered to claims of indirect discrimination for measures that are a proportionate means of achieving a legitimate aim. Any decision to refuse to grant a tenancy to someone falling in these categories must be accompanied by a comprehensive audit trail to ensure the decision can be defended if later challenged. Importantly, this applies to the entire rental process, from advertising and viewings to tenancy agreements.
Pets
The Act also provides that landlords cannot unreasonably refuse to permit tenants to keep a pet. The Government was criticised for removing the landlord’s right in an earlier draft of the Act to require tenants to fund pet damage insurance. Will landlords be able to refuse to allow tenants to keep pets which pose a significant risk of causing damage if they can show that the likely cost of remedying that damage cannot be met through the deposit?
Decent Homes Standard / Awaab’s law
The Decent Homes Standard has been extant in the social housing sector for more than twenty years. With the passage of the RRA, a version of the Standard will apply to PRS as well. The details will need to be worked out by the Government, so this change is likely to happen after the introduction of the main sections of the Act. Awaab’s law is also extended into PRS, requiring landlords swiftly to address certain immediate hazards such as damp and mould.
PRS Database and Ombudsman
The RRA establishes a PRS database, which will contain details of PRS landlords and their properties, and any penalties entered against such landlords. Additionally, an ombudsman service will be set up to deal solely with tenants’ complaints against landlords. While it is disappointing that the ombudsman cannot address landlords’ complaints, this move should be welcomed. It should make courts more alert to tenants’ opportunistic complaints made in response to possession claims. A court considering such complaints may query why the tenant did not raise them earlier through the ombudsman. The PRS database and the ombudsman service will both be funded through fees levied on landlords. The need for secondary legislation to enact these changes mean we should not expect to see them until late 2026 at the earliest.
Conclusion
Given the increase in PRS tenancies from 2.1 million households in 1996-7[4] to 4.7 million in 2023-4[5] , it is clear why the Government has acted to safeguard tenants’ rights. However it is disappointing that the additional regulatory burdens the RRA places on landlords are not matched by rights enabling them to deal more effectively with tenant misconduct. The county court process for evicting tenants takes many months, during which time landlords are likely to be receiving no rent. It seems likely that these reforms will squeeze many non-institutional landlords out from the market, leaving behind those with the financial clout to comply with the new regulations and shoulder the increased risk of tenant non-compliance. Aside from that, it is reasonable to expect rents to rise, both as a result of the additional costs levied on PRS landlords, and the greater uncertainty for landlords flowing from the new rights the RRA grants tenants.
[1] https://www.gov.uk/government/statistics/english-housing-survey-2021-to-2022-private-rented-sector/english-housing-survey-2021-to-2022-private-rented-sector
[2] ibid
[3] https://committees.parliament.uk/writtenevidence/92616/html/#_ftn3
[4] Chapter 1: Profile of households and dwellings – GOV.UK
[5] Chapter 1: Profile of households and dwellings – GOV.UK
For further information, please contact Scott Goldstein, Partner in the Litigation, Arbitration & Dispute Resolution department, or alternatively, telephone 02074654300.
