Renters' Rights Act: how landmark reforms to end no-fault evictions will affect you

Controversial rental reforms have become law after the legislation completed its parliamentary stages and was given royal assent.

The Renters’ Rights Act abolishes “Section 21” no-fault evictions and unreasonable rent rises in England. Under the reform, renters will get the right to end tenancies with two months’ notice.

The new rules limit advance rental payments to one month and a new Private Rented sector Ombudsman will be launched.

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Another change includes giving tenants the right to request permission for a pet - which landlords can’t say no to without a good reason.

But there are warnings that landlords may exit the rental market as a result of the extra burdens, which could push rents up and leave some tenants in an even worse position.

It is another blow to buy-to-let investors with the National Residential Landlords Association labelling some of the changes a “dog’s dinner”.

During the debating period of the bill, ministers rejected calls from the House of Lords to add an amendment requiring tenants to pay an extra deposit if they want to keep a pet in the property as well as exemptions for student homes.

Ministers will outline how all elements of the bill are rolled out in the coming weeks.

Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), said: “This is the most significant shake-up of the rental market in almost 40 years, and it is imperative that the new systems work for both tenants and responsible landlords.”

There have been plenty of warnings that the changes included in the Renters’ Rights Act will lead to higher rents as more landlords exit the sector to avoid the extra restrictions.

Research by flatshare website SpareRoom claims that two thirds of UK landlords plan to leave the rental sector or reduce their portfolios this year with 88% expressing no confidence in the rental market in 2025.

While renter associations have backed the plans, landlords have stressed they will need time to digest the reforms.

What is the Renters’ Rights Act?

The legislation introduces a range of new requirements in the hope they will more comprehensively protect tenants in private rented homes.

It goes further than the previous Tory government's Renters' Reform Bill, which had said it would delay scrapping Section 21 notices.

This Act bans no-fault evictions and also prevents landlords from blocking tenants on benefits or with children.

Bidding wars will also now be blocked to stop landlords and letting agents charging above the listed rental price.

It introduces fines for landlords of up to £7,000 if homes do not meet a “decent standard”.

The Act had initially proposed banning landlords from asking for rent in advance but this will only apply to new tenancies now the legislation has become law.

Landlords are now additionally only able to raise rents once a year, and only to the “market rate”.

Rather than typical 12 month contracts, all new tenancies will be automatically converted to a periodic tenancy.

Tenants will still be able to end the agreement with two months' notice but landlords will require a legitimate reason for eviction.

The introduction of the new Act comes following warnings from Tory peers and landlords that the reforms were rushed and could drive landlords out of the market, pushing rents up further.

How will the Renters’ Reform Act affect tenants and landlords?

Rental reform campaigners have, perhaps unsurprisingly, welcomed the reforms as they give tenants more security.

While tenant groups have welcomed the changes and extra protections for renters, research suggests the reforms could actually block access to good-quality housing for people who don’t fit the standard referencing mode, including overseas applicants, the self-employed and those without a UK credit history.

Research by estate agency brand LRG warns that the cap on advance payments means landlords may be unwilling to take tenants who are self-employed or on lower incomes as they would currently ask for more money upfront as a form of security.

The legislation also aims to make it easier for tenants to have a pet. But while the legislation said this will be subject to tenants having insurance to cover pet damage, this was removed during the debates and now landlords will be required to take out cover instead.

Another amendment, backed by the NRLA and the House of Lords, had proposed letting landlords request three weeks’ deposit in return for allowing their tenant to keep a pet.

MPs also pushed back on this, with ministers warning it would be open to abuse.

Members of the House of Lords also raised concerns about the end of fixed term tenancies, which supporters claim provides more certainty for property investors.

There are warnings that this could hit student accommodation, especially as there will be more requirements for serving an eviction notice.

There is an exemption in the legislation that allows landlords to regain possession of properties let to students in line with the academic calendar but only where the property is a house in multiple occupation (HMO) with three or more bedrooms.

The NRLA warns that this excludes many landlords with smaller student lets.

Beadle added: “If landlords are not confident they can regain possession in time for the next academic year, many will stop letting to students altogether. The result will be fewer homes, higher competition, increased rents, and less choice for students.”

Concerns have been raised that the new legislation will force already squeezed landlords out of the market.

Chris Barry, director at property law firm Thomas Legal, said: “There is no doubt that this Act will help many who have been victim to greedy landlords in the past, but this is another blow to landlords who have been hit by a monsoon of challenges in recent years.

"Landlords now have to contend with higher borrowing costs, increased taxes and, in some cases, extreme costs for building safety remediation.

“Gone are the days of landlords making a solid return on income and capital, which begs the question for many: is there a better home for their money?

“There is now a real risk we will see fewer landlords and this could lead to increased rent unless the corporates step in to supply the market, which comes with its own risks.”

Meanwhile, others have warned there are ways the new legislation could be exploited.

“Several loopholes could still test the system from landlords exaggerating rent ‘market values’ to price tenants out, to claiming they plan to sell then quietly re-letting soon after, or shifting homes into short-term lets such as Airbnb to sidestep the new rules,” Ranald Mitchell, director at Norwich-based mortgage broker Charwin Mortgages, said.

“The intentions are right as renters need stability but unless enforcement keeps pace, these reforms could tighten supply, push up rents and test the patience of both landlords and tenants alike.”