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17/12/25 3:30 pm
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A licensing expert warns that the swathe of legislative changes due in 2026 will lead to a “race to the bottom” with both tenants and small landlords as the losers.
Phil Turtle, of consultancy Landlord Licensing and Defence, predicts that as the Renters’ Rights Act is implemented, accidental and small landlords will inevitably be the first to sell up, worsening supply levels.
He tells The Telegraph: “What is already happening inevitably is that the older-style landlords who really cared about their tenants and providing decent homes for them will leave. New money-motivated landlords will replace them, but the focus will be on picking up properties cheap from distressed existing landlords and maximising profits.”
There will be new penalties in place for landlords while, since 27th December, councils can now charge fines of as much as £40,000 for breaches such as illegal eviction.
Paul Shamplina, of Landlord Action (pictured left), says: “Self-managed landlords are more vulnerable [to these penalties].” More landlords will need to hire an agent, he adds, further eating away at profits.
One of the biggest threats landlords face is the increasing use of Rent Repayment Orders, with recent and upcoming changes allowing for higher penalties and broader grounds for tenants and local authorities to pursue claims, Shamplina adds. "The risk of costly enforcement action has never been greater, particularly where landlords fall short of their statutory duties such as providing correct written statements of tenancy terms and meeting all prescribed legal requirements, as these failures can expose landlords to enforcement action and potential Rent Repayment Orders.”
Meanwhile, more local authorities are poised to bring in selective licensing. Geospatial technology company Kamma reported that while 23 additional and selective schemes launched in 2024, as many as 40 new schemes were expected to launch in 2025.
Turtle believes councils will want to raise extra revenue by implementing these schemes. He adds: “There are so many extra punitive fining opportunities under the Renters’ Rights Act for the councils’ money-making machine.
“Now any slip-up on a tenancy agreement or the pre-tenancy paperwork is going to cost a minimum of £4,000 fine with, just like speeding, no leeway or compassion available from power-crazed councils enforcement officers.”
The imminent end of Section 21 evictions continues to prompt concerns about the impact on an increasingly backlogged court system.
NRLA chief executive Ben Beadle labels it a disaster waiting to happen. “If landlords are already facing an almost eight-month wait to legally take possession of their homes at a time when the number of claims is falling, then what can we expect when the inevitable avalanche of claims drops post-Renters’ Rights Act?”
An increasing tax burden is also on the horizon, as tax paid on property income will increase by 2% from 2027.
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