Tenants win rights — but at what cost? Rentals set to shrink as owners sell up

Tomorrow marks a turning point for the private rental market as the Renters’ Rights Act 2025 comes into force, promising stronger protections for 11 million tenants. It’s a long-awaited shift towards fairer renting, with an end to no-fault evictions, limits on rent hikes and greater powers to challenge landlords. But beneath the headlines, a more troubling picture is emerging. Faced with tighter rules, rising compliance risks and heavier penalties, many landlords are already exiting the market. The result could be fewer homes available to rent, higher prices, and growing pressure on those least able to compete — raising concerns that a policy designed to improve security may, in practice, deepen the UK’s housing crisis.

Photo by Jakub Żerdzicki on Unsplash

Tomorrow is the day that renters get their long-awaited rights and Landlords leave the buildings.

Good for renters who deserve a safe and secure home. Bad for landlords with more complex rules to comply with. Overall, the impact could be fewer homes to rent and higher rents leaving many homeless. We need a thriving private rental sector, and this well intended legislation could add to our housing crisis.

The Renters’ Rights Act 2025 comes into force tomorrow (1st May). The Government says it will level the playing field between landlords and tenants with better protection for 11 million renters. On the face of it that’s great but as with these changes, they often have the opposite to the desired effect.

There are a lot of changes to content with. Landlords in the residential rental sector are alarmed by the magnitude of them, and many are turning tail, selling up and getting out of the rental market. Of course, no one wants to be living in the grip of a bad landlord, but when landlords sell up the stock of homes for rent goes down, rents go up and many tenants face eviction and struggle to find somewhere else they can afford in places where they’ve made their lives. Many may end up homeless.

The new laws will ban so-called ‘no-fault’ evictions (section 21 evictions) and Bottom of Form

must provide a notice period, usually four months, and then apply to the court to get their property back if the tenant refuses to move out. The other major change is an end to fixed-term tenancy contracts. All tenancies will automatically become “rolling” after the 1st of May, meaning landlords can’t enforce a set end date to their tenancies. Tenants are in theory now allowed to stay as long as they like and can give their landlords just two months’ notice if they want to move out.

Landlords will also be banned from hiking rent more than once a year and must give tenants at least two months’ notice of any rent increases. The new law gives tenants the power to challenge any proposed rent increases that are above the current market rate, and it will be easier for tenants to take landlords to a tribunal. Landlords and estate agents will have to publish a required rent for their property, and they will be banned from “asking for, encouraging, or accepting” any bids which go above this recommended price. Rules around advance rent payments are also changing and once the deal is signed landlords can only ask for one month of rent in advance. There are also tighter restrictions on the size of deposit a landlord can charge.

Landlords who break any of the new rules can be fined up to £7k for a minor offence, and up to £40k for serious or repeated breaches.

The last thing the UK needs, given the size of the housing crisis we’re facing, is to lose rental properties out of the market. We want the poor landlords gone and everyone to have a safe and comfortable home. These changes do address that but there’s the law of unintended consequences. In this case that means landlords are upping sticks and selling their rental properties. Many independent landlords have fallen into a situation where they’ve become a landlord because they couldn’t sell a property. Some have seen buy-to-let property as an alternative to a pension. For others it has been an income generating businesses. However, the harder it is to comply with a plethora of rules the more people are likely to throw in the towel. People become scared in the face of complexity, that they will get it wrong and face big penalties. The bad guys don’t care.

On one hand landlords selling up may make it easier for first time buyers to buy homes. Depending on how many come up for sale in a particular area there’s the possibility of homes falling a little in price and becoming more affordable. Solicitors’ firms are reporting in some areas that landlords are instructing them to seek possession so that they can sell their entire buy-to-let stock of homes saying the Renters’ Rights Act 2025 is the final straw in making their property investments no longer commercially or practically viable.

The knock-on impact of this could be increased homelessness. Another concern is that many older people who have retired with only the state pension to fall back on will find it difficult to compete with higher income prospective tenants for the properties that stay on, or come onto the rental market. This legislation has the best of intentions and could end up having the worst of outcomes for many.