The Renters’ Rights Act so far - neither exodus nor business as usual

After 5 months it’s neither an exodus nor business as usual for buy-to-let landlords. We’ve had the proponents and the detractors. Who’s right so far?

Comment by Tom Entwistle, LandlordZONE

Almost five months since the Renters’ Rights Act (RRA) swept away Section 21 and fixed-term assured shorthold tenancies in England and brought in many more hurdles for landlords, we are still digesting the ramifications.

It’s perhaps long enough for me to test some of the louder predictions made on both sides of the debate, but not long enough to finally settle them. 

The early evidence suggests the Act is changing how landlords run their businesses much faster than it has changed the size or shape of the rental market. The early data that will really show how the new possession and rent challenge regimes are performing has yet to be made available.

Before 1 May, forecasts ranged from a mass sell-off of rented homes to the view that responsible landlords would barely notice the difference. In fact, some commentators held the view that the new rules would be advantageous to landlords, while others were vociferous in opposition. Neither result has quite come to pass. 

What follows is an attempt to separate what the early experience and data actually show us from what interested parties would like them to show. Then again, it’s early days, so there’s the usual health warning attached. 

Apprehension is easing, not disappearing

The buy-to-let mortgage lender Paragon Bank, whose Landlord Trends research is carried out by Pegasus Insight, surveyed landlords both before and after the RRA commencement. 

These findings were instructive. They showed that 69 per cent of the landlords surveyed expect the Act to have a negative impact on their own lettings business, but that’s now come down from the 76 per cent result previously. 

Paragon says it’s made no changes to its buy-to-let underwriting in response to the Act and has seen little sign that other lenders have done so. The Mortgage Advice Bureau reports that brokers’ conversations with landlords have moved on from helping them understand the legislation to working out how to run a profitable portfolio under it. 

The feedback they have received, of the most common day-to-day complaints cited, has mostly been about the extra administration needed and the new notice period requirements.

Findings like these need reading with some caution. Lenders and brokers have an obvious vested interest, a strong commercial sense, in presenting buy-to-let as still a sound long-term investment. I’m not saying their figures are wrong; it’s simply a matter of emphasis. 

A seven-point fall in pessimism still leaves more than two-thirds of landlords expecting a negative outcome. Perhaps a fairer reading is that landlords who have stayed are learning to live with the new rules, not that they have come to like them.

Repossession, the big issue

Abolition of Section 21 stands out as the main concern for most landlords, especially those who have experienced the repossession process before and are anticipating it getting a lot worse under the RRA.

The clearest early effect was a scramble to get possession before the stable door closed. Section 21 notices served before 1 May could still be used, but only if court proceedings were issued by 31 July 2026 at the latest, so there was a definite increase in the number of landlords going for possession at this late stage.

It was risky at that late gestage, as if any of the necessary documentation turned out to be defective, there would be no opportunity to mend it and re-serve notice. Many of these cases are ongoing, so it will be interesting to see how many actually make it to a possession order.

Landlord Action, a professional eviction service, as reported on this site before, recorded July instructions 28 per cent higher than a year earlier, with almost a third of new instructions linked to that deadline. It has since predicted a sharp rise in cases coming to the courts.

The Ministry of Justice figures for April to June 2026, examined in my earlier article on court and tribunal capacity, show landlord possession claims up 6 per cent over the same quarter of 2025, with accelerated claims up 16 per cent. 

To be clear about what that second figure means. Accelerated claims are the old Section 21 procedure, so the rise reflects the previous regime being wound up rather than the new one being evaluated. The MoJ’s own statisticians say they cannot yet tell how much of the movement in the figures is down to the Act.

Some industry professionals are reporting a slight change in tone. Law firm Thackray Williams has said that it has seen more instructions from landlords seeking vacant possession but at the same time followed by more enquiries from tenants challenging notices, as they cannot find anywhere else to live. 

That’s just one firm’s experience, and possession work is its business, but it is a plausible forecast of the new defended Section 8 cases that will now form a larger share of court time. 

The MoJ is due to publish its July to September figures – the first full quarter under the new rules – on 12 November 2026. That release, rather than anything else published so far, will be the first real test, the first real insight into the ending of the old system and the beginning of the new.

Pressure on the courts

As I pointed out in a previous article, experts have long warned the government that removing section 21 and allowing rent increase appeals would overload an already stretched court system.

LandlordZONE has already covered this topic on many occasions with articles looking under the hood at the government’s plans in more detail, trying to assess the effectiveness of the new proposals and their possible impact on landlords.

Not only are the courts and tribunals feeling the strain, but the court bailiffs service is also suffering with understaffing, causing blockages in the eviction process. Even with section 21, evictions could stretch to 9 or even 12 months; now it could take even longer with Section 8 claims under the RRA. 

The situation is not acceptable. Will the government’s promise to sort it out come to fruition? That’s a very important question.

Housing supply and rent levels

Zoopla’s September rental market report shows the number of homes available to rent 3 per cent lower than a year earlier. They show the decline beginning in May after three years of improving supply. Enquiries per listing were shown to be at their highest for almost two years, and Zoopla expects annual rent growth to rise to between 4 per cent and 5 per cent by the end of the year.

Zoopla resists the temptation to blame the transition, attributing most of the squeeze to higher mortgage rates keeping would-be first-time buyers in rented homes for longer. It notes that Scotland, which has run a similar tenancy system for some years, is showing exactly the same pattern. The housing supply for renting in Wales has actually increased, it says. 

Knight Frank takes a different line, arguing that the Act has worsened an existing shortage and that some landlords are asking for higher rents in order to reflect the added risk around voids, arrears and recovering possession.

Is it possible both views are true at once? The Act is one pressure among several others, but it is the major one that pushes landlords hard in the same direction. When the time commitment, cost and risk of providing something rises, investors are more cautious and they demand a higher return for taking the extra risk. Not all landlords are prepared to continue to do it. 

How are landlords adapting?

Beyond the headlines in the press, the numbers, the statistics we have gleaned already, and the more telling changes are in how landlords are operating. Brokers report widespread landlord portfolio reviews. 

Whether this reassessment is looking at whether different ownership structures (private or incorporated) still make sense under the current tax regime, whether their borrowing needs to be reorganised, or which of their properties still make a profit. 

Tenancy agreements have to be redrafted around periodic tenancies, and there’s now a requirement to serve pre-tenancy information. Any landlord still issuing paperwork that purports to create a fixed term or is missing compulsory information, is taking an unnecessary risk, with heavy fines now the penalty. 

Record-keeping, once just an afterthought, if at all for most small-scale landlords, has become a central plank in the running of tenancies under the RRA. Safety considerations and their documentation become paramount, and evictions under Section 8 are, without documentary evidence, a non-stater.

In more than 40 years of developing and letting residential and commercial property, I have seen the sector absorb a great deal of change. From when I stated the arrival of the assured shorthold tenancy in the late 1980s to the imposition of the Section 24 tax changes of the past decade. Now this new Act.

The pattern has usually been the same. Those who are well organised learn to adapt, the reluctant sell up, and those who are unprepared find out the hard way over a longer period. This Act is likely no exception, but it has sharpened the divide more than ever before.

The next phase is already scheduled

On 9 September the government confirmed that the private rented sector database, now rebranded as the “Register your rental property” service, will start on 15 December 2026, starting in the West Midlands and then moving on region by region. 

Once a region is scheduled, landlords have three months to register. Initially, every landlord who is actively letting must be registered by 14 November 2027. The fee will be £65 per property per year. Later, properties waiting to be let will be required to be included.

See Suzanne Smith’s highly comprehensive guide here: https://theindependentlandlord.com/prs-database/ 

The registration numbers of landlords will be required to appear on their adverts, and councils will get information about landlords and their properties in detail they have never previously obtained. 

Unregistered landlords will face civil penalties of up to £7,000, rising to £40,000 for serious or repeated failures to comply. A landlord who is not registered will generally be unable to obtain a possession order other than on anti-social behaviour grounds. 

Further into the future will come the landlord ombudsman scheme, with likely a further fee, and the extension of the Decent Homes Standard and Awaab’s Law to private renting. The exact timing of these later events remains to be confirmed.

Looking further ahead

What follows is my opinion rather than evidence, though it is informed by what the first few months have shown.

First, my reading of the situation is, as I think one can say with some certainty, I expect a gradual thinning of the small-scale “amateur” landlord base, rather than a sudden exodus. Most landlords cannot sell overnight, and many will leave only when a tenant moves on or a mortgage comes up for renewal. 

Over several years that will add up, and the sector will lean towards larger, better capitalised business with more often, incorporated portfolio landlords. 

That’s not to say there won’t still be a large cohort of small-scale buy-to-let landlords in the business. Those willing to get themselves organised and willing to learn the rules will be well placed to carry on. Many will consider operating through a limited company. 

In an age where money loses its value (inflation running at 3.7 per cent and predicted to go higher) and when governments are inclined to inflate away their national debt, property is a solid store of value when it tends to beat inflation over time. There are few better ways to achieve this.

The second point is that tenant selection will become more important and more rigorous. When landlords can’t easily recover possession, they will take more care over whom they let into their property in the first place. 

This conflicts somewhat uneasily alongside the new rules, which have blanket bans on tenants with children or those receiving benefits. However, referencing, guarantors and affordability checks will carry more weight with landlords and agents, and tenant applicants who struggle with financial stability will find the letting market harder, not easier to get into.

Third, the main pressure points in the system will be a defended possession claim and the system of rent increase challenges through the tribunal service. If more Section 8 claims are contested and more tenants refer a Section 13 rent increase notice to the First-tier Tribunal, court and tribunal capacity and timescales could result in long delays. That’s not to mention the time and cost involved for landlords.  

Fourth, the property register will change the nature of council enforcement. For the first time in England, local councils will know exactly who is letting, what they are letting, and where. Enforcement, therefore, is likely to become a targeted process rather than simply reacting to tenant complaints. Good news for those landlords who keep their properties in good order, bad for those rogue landlords who have always operated under the radar

A final word

None of this means the Act will fall flat on its face. Tenants have undoubtedly gained security of tenure, and landlords who run their properties well may find themselves competing against fewer rogues in the business. Those who stay the course could also gain financially, as this increased regulation will not lead to lower rents; quite the opposite. 

The price of the extra tenant security is a smaller, more expensive and more selective private rented sector. It’s the outcome many in the industry have long warned about and one the government will need to watch very closely.

[Main image credit: Kampus Production]