Renters' Rights Act: What Landlords Need to Know
A complete guide to the UK’s new rental legislation. Learn what’s changing, when it’s happening, and what every landlord must do to stay compliant.
Key Reforms
Your Responsibilities
Key Reforms: Understanding the New Landscape
The Renters’ Rights Act is designed to improve tenant security, housing quality, and fairness across the private rented market. For landlords, it means adapting to new tenancy structures, compliance duties, and stricter enforcement.
Below are the key elements of the act and what each change means for you.
1: Abolition of Section 21 “No-Fault” Evictions
The Renters’ Rights Act will permanently abolish Section 21, the clause that currently allows landlords to regain possession of a property without providing a reason once a tenancy’s fixed term has ended. This change represents one of the most significant shifts in landlord law for more than 30 years.
Once enacted, landlords will only be able to end a tenancy under specific legal grounds such as rent arrears, property sale, or serious tenant misconduct through a reformed Section 8 possession process. The Government’s aim is to give tenants greater long-term security, but for landlords it removes a simple and predictable route to regain possession.
To navigate this change effectively, landlords will need to understand the new possession rules, notice requirements, and supporting documentation expected under the updated system.
The abolition of Section 21 is a landmark change that replaces the current assured shorthold tenancy (AST) system with a new framework of Assured Periodic Tenancies (APTs). For landlords, this means the end of recovering possession of your property simply by serving a two-month notice without providing a reason.
Open-Ended Tenancies: All new and existing assured tenancies will become periodic, continuing indefinitely unless the tenant chooses to leave or the landlord can rely on a specific, valid ground for possession.
Termination by Landlord: You will no longer be able to use a Section 21 notice. To regain possession, you must use the revised Section 8 procedure and prove one of the statutory grounds applies.
Termination by Tenant: Tenants will gain flexibility, with the right to end the tenancy at any time by providing a two-month written notice.
With the removal of Section 21, the government has overhauled and significantly strengthened the grounds for possession under Section 8 of the Housing Act 1988. The number of grounds has been expanded and existing ones have been clarified to ensure landlords can still regain their property under legitimate circumstances.
The changes introduce or strengthen several mandatory grounds, meaning the court must grant possession if the ground is proven:
Selling the Property: A new mandatory ground allows possession if you genuinely intend to sell the property. However, you will be unable to market or re-let the property for 12 months after using this ground to prevent misuse.
Landlord or Family Member Moving In: A strengthened mandatory ground for landlords (or their close family) who wish to move into the property as their principal home.
Persistent Rent Arrears: A strengthened mandatory ground to tackle tenants who repeatedly fall into arrears, even if they clear the balance before the court hearing. The threshold for mandatory eviction, however, is being increased from the equivalent of two months' to three months' of unpaid rent.
Anti-Social Behaviour: New language and lower evidential thresholds are designed to make it easier and faster for landlords to seek possession against tenants engaging in anti-social or criminal behaviour.
The new periodic tenancy model is designed to provide tenants with a greater sense of security and stability, empowering them to challenge poor practice without the fear of arbitrary eviction.
Key elements that strengthen tenant rights and stability include:
Decent Homes Standard: This standard will be extended to the private rented sector for the first time, placing a statutory duty on landlords to ensure properties are safe, warm, and well-maintained.
Awaab’s Law: Landlords will be required to investigate and fix reported health hazards, such as serious damp and mould, within specified timeframes.
Rent Increase Challenges: Tenants can now challenge rent increases they believe are above the market rate at the First-tier Tribunal, though rent increases can only occur annually.
Pet Ownership: Landlords cannot unreasonably refuse a tenant’s request to keep a pet. They can, however, require the tenant to take out pet insurance to cover potential property damage.
Discrimination Ban: It is now illegal for landlords or agents to impose blanket bans on renting to tenants who are in receipt of benefits or who have children.
The government acknowledges that increasing reliance on the court system will require procedural improvements. The reforms aim to streamline the process, though court backlogs remain a concern that could lead to delays in possession claims.
The key components of the modernised process include:
Private Rented Sector Ombudsman: All private landlords must register and join a new Ombudsman scheme, which will provide a mandatory redress service for tenants. This body will offer fair, impartial, and binding resolutions to disputes, which can potentially resolve issues before they escalate to court.
Mediation Services: The Act makes provision for the Ombudsman to offer landlord-initiated mediation, which can help resolve tenancy disputes without the need for litigation.
Digitalisation: The court process for possession claims is expected to be modernised, with revised statutory notice templates and new online filing guidance to simplify applications for landlords.
Increased Notice Periods: The notice period for mandatory serious rent arrears possession claims is being extended from two weeks to four weeks, giving tenants more time to resolve the situation before proceedings begin.
The shift from "no-fault" to "for-cause" evictions fundamentally increases the burden of proof on the landlord. Since possession can now only be obtained by proving a statutory ground in court, meticulous record-keeping is no longer optional—it is critical.
To successfully pursue a Section 8 claim, landlords must be prepared to provide:
Proof of Intention: For grounds such as selling or personal use, you must have clear and verifiable evidence of your genuine intention to prevent accusations of misuse.
Detailed Records: Landlords must maintain comprehensive and accurate documentation to substantiate any claim. This includes:
Full rent ledgers and payment histories.
Records of all tenant communication.
Inspection reports and maintenance logs.
Evidence, where applicable, of anti-social behaviour (e.g., police reports, witness statements).
The new legislation adds significant complexity and risk for private landlords. Compliance with the Decent Homes Standard, navigating the expanded Section 8 grounds, mandatory Ombudsman membership, and the increased evidential burden all point towards a future where professional expertise is non-negotiable.
This is where Elliot Leigh’s expertise and Guaranteed Rent scheme offer the ultimate protection and peace of mind:
Risk Elimination: Our scheme removes the biggest financial risks associated with the new periodic tenancies. We guarantee your rent on the same day every month, even if the property is vacant or the tenant fails to pay.
Full Compliance Management: We are responsible for keeping your property compliant with all landlord legislation and obligations, including the Decent Homes Standard.
Proactive Maintenance & Repairs: We cover all minor repairs and maintenance through our 24/7 in-house team at no cost to you, proactively addressing issues that could otherwise lead to tenant complaints and Ombudsman disputes.
Expert Possession Process: Should possession be required, our experienced team manages the entire Section 8 process, including meticulous evidence gathering and liaising with the courts and the Ombudsman on your behalf.
In this new era of property management, professional oversight is your safeguard against complexity and financial uncertainty. Our Guaranteed Rent service is perfectly positioned to handle every new challenge, ensuring your investment remains secure and profitable.
How the Elliot Leigh Guaranteed Rent Scheme Protects You
The abolition of Section 21 removes your most straightforward route to regaining possession but with Elliot Leigh, you never need it. When you enter a Corporate Lease Agreement with us, Elliot Leigh becomes your tenant, not the occupant. This means your agreement is a commercial lease between two parties, sitting entirely outside Assured Shorthold Tenancy legislation. Section 21, Section 8, and the entire reformed possession process simply do not apply to your arrangement with us.
Your lease runs for a fixed term of 2–5 years. If you ever need to regain your property to sell, refurbish, or move in you do so according to the clearly defined terms of that commercial contract, not through the courts. No Ombudsman referrals, no evidence gathering, no tribunal delays.
2: End of Fixed-Term Assured Shorthold Tenancies
Under the Renters’ Rights Act 2025, the government will abolish fixed-term Assured Shorthold Tenancies (ASTs) the standard tenancy model in the UK since 1988. Once the act comes into force, all new and existing tenancies will automatically become rolling periodic agreements, giving tenants more flexibility but reducing fixed-term certainty for landlords.
This reform fundamentally changes how landlords plan tenancies, manage cash flow, and handle notice periods. Below is a breakdown of what’s changing and what landlords need to consider.
The key change is the complete abolition of fixed-term Assured Shorthold Tenancies (ASTs) in England. They will be replaced by a new form of agreement: the Assured Periodic Tenancy.
Rolling Contracts: All new assured tenancies will be periodic from day one. This means they will be open-ended rolling contracts with no fixed end date, continuing indefinitely until lawfully ended by either the tenant or the landlord.
Existing Tenancies: Once the new law is fully implemented, all existing fixed-term ASTs will automatically convert into Assured Periodic Tenancies after their initial fixed term expires.
Ban on Fixed Terms: It will be an offence for a landlord to attempt to grant a new tenancy for a fixed term after the legislation comes into force, with potential fines of up to £7,000.
Greater Flexibility: The government's goal is to provide tenants with more flexibility to move when their circumstances change and to challenge poor conditions without the fear of a retaliatory eviction at the end of a fixed term.
The move to periodic tenancies gives the tenant significantly more control over the duration of the agreement by standardising and simplifying the notice process for both parties.
Tenant’s Right to Leave: Tenants gain the right to end the tenancy at any point by giving a minimum of two months' written notice to the landlord. This enhanced flexibility allows tenants to move freely when their circumstances change, without being trapped in a fixed-term contract.
Landlord’s Right to Possession: The Section 21 ('no-fault') eviction route is abolished. Landlords will only be able to regain possession of their property by citing a specific, legitimate reason (or "ground") under the revised Section 8 process.
Notice Variation: The amount of notice a landlord must give will depend entirely on the ground used. For instance, notice periods can range from two weeks (for severe anti-social behaviour) to four months (if the landlord is planning to sell or move in). In addition, for grounds like moving in or selling, the tenant is protected from eviction during the first 12 months of the tenancy.
To adapt to the end of fixed-term ASTs, landlords should:
Review all current tenancy agreements and prepare for automatic conversion once the law is enacted.
Update property management and rent collection systems to accommodate ongoing periodic tenancies.
Communicate clearly with tenants to maintain stability and avoid unnecessary early terminations.
Consider using a corporate lease or guaranteed rent arrangement, which provides fixed income and security even without fixed tenancy terms.
Elliot Leigh’s Guaranteed Rent Scheme operates under corporate leases — not ASTs — meaning landlords continue to receive full rent every month, regardless of tenant changes or legal reforms.
How the Elliot Leigh Guaranteed Rent Scheme Protects You
The move to rolling periodic tenancies means landlords lose the income certainty that fixed-term ASTs once provided tenants can now leave with just two months’ notice, at any time, for any reason. With the Elliot Leigh Guaranteed Rent Scheme, that uncertainty disappears entirely.
Your Corporate Lease runs for a fixed term of 2–5 years. Regardless of what the occupying tenant does whether they leave after three months, cause a dispute, or stop paying your rental income is unaffected. We pay you on the same date every month for the full duration of the lease. The new rolling tenancy model changes nothing about your financial position.
3: Rent Controls, Payment Terms, and Market Transparency
The Renters’ Rights Act introduces targeted measures to increase transparency, fairness, and affordability in the rental market. While the Act does not introduce universal rent caps, it fundamentally changes the rules around how and when rent can be increased and limits the financial burden on tenants entering a new tenancy.
The reforms provide tenants with greater stability by standardising the process for rent reviews and strengthening their ability to challenge unreasonable price hikes. This is achieved through the exclusive use of the statutory Section 13 notice procedure.
- Annual Limit: Landlords will only be permitted to increase the rent once every 12 months (12 months from the date of the tenancy starting or the date of the last rent increase). Any clause in a tenancy agreement that attempts to schedule more frequent increases will be unenforceable.
- Mandatory Notice: Any proposed increase must be notified to the tenant using the prescribed Section 13 form, giving the tenant a minimum of two months' notice of the change.
- Tenant Challenge: Tenants will have an expanded right to challenge rent increases they believe are excessive or above the local market rate by applying to the First-tier Tribunal (FTT). The FTT will determine a fair market rent for the property, and the new rent will only take effect from the date of the Tribunal's ruling.
- Abolition of Clauses: The Act explicitly abolishes contractual rent review clauses within the tenancy agreement, making the Section 13 notice the only legal mechanism for raising the rent.
A core transparency measure is the ban on accepting or encouraging offers above the advertised rent. This is designed to create a fairer market by preventing tenants from being pushed into inflated rental payments due to intense competition.
- Advertising Requirement: Landlords and their agents are legally required to publish a specific asking rent for the property.
- Prohibition: It will be illegal to invite, encourage, or accept any offer of rent that exceeds the advertised price. This practice is treated as a prohibited payment, with local authorities empowered to enforce fines against non-compliant landlords or agents.
- Fair Access: This change ensures that the final contracted rent accurately reflects the initial advertised price, allowing prospective tenants to make decisions based on the published cost rather than their ability to outbid others.
The legislation places strict limits on the amount of rent that a landlord can demand upfront as a condition of granting a tenancy, preventing the use of large initial payments as a barrier to housing access, especially for low-income tenants or students.
- One Month Limit: Landlords are prohibited from demanding more than one month's rent in advance as a mandatory requirement to secure a tenancy.
- Voluntary Payments: A tenant may, however, voluntarily offer to pay more than one month's rent in advance (e.g., three or six months' rent) to satisfy their own financial or referencing needs. If this occurs, the landlord must document that the offer was made voluntarily without coercion.
- Prohibited Pre-Tenancy Rent: Rent cannot be requested or accepted before both parties have formally signed the tenancy agreement, as this constitutes a prohibited payment under the Tenant Fees Act.
Elliot Leigh's Guaranteed Rent scheme offers exceptional protection against these complexities, insulating you from rent payment uncertainty and ensuring full compliance with the new rules on rent collection and tenancy regulation.
How the Elliot Leigh Guaranteed Rent Scheme Protects You
Under the new rules, landlords operating ASTs face annual rent increase restrictions, mandatory Section 13 notice requirements, and tenant rights to challenge increases at the First-tier Tribunal. Rental bidding is banned, and upfront payments are capped at one month. These reforms limit your ability to adjust income in line with rising costs or market demand.
None of these restrictions apply to your Corporate Lease with Elliot Leigh. Your guaranteed rent figure is agreed at the outset of the lease and is fixed for its duration no tribunal challenges, no notice procedures, no bidding restrictions. You always know exactly what you will receive, every month, regardless of what the rental market does around you.
4: Enhanced Property Standards and Landlord Accountability
The Renters Rights Act raises the bar for property quality and landlord responsibility across the private rented sector.
For the first time, many of the same standards that apply to social housing will also apply to private landlords.
These reforms are designed to improve living conditions for tenants and create a more professional, transparent rental market.
Each of the following areas represents a key compliance priority under the new law.
The Renters' Rights Act extends the Decent Homes Standard (DHS), which previously only applied to the social housing sector, to the entire private rented sector (PRS). This is a foundational reform intended to provide renters with safer, higher-quality homes.
The DHS is based on a set of criteria that a property must meet:
- Safety: The home must be free from serious health and safety hazards, particularly those classified as Category 1 hazards under the Housing Health and Safety Rating System (HHSRS).
- State of Repair: The property must be in a reasonable state of repair.
- Facilities: It must have reasonably modern facilities and services (e.g., modern kitchens and bathrooms).
- Thermal Comfort: It must provide a reasonable degree of thermal comfort, which includes effective heating and insulation.
- Damp and Mould: A key addition to the reformed standard is the explicit requirement that a home be free of damp and mould.
The Act also incorporates principles from Awaab's Law, which sets clear legal timeframes within which landlords must take action to address serious hazards once they have been reported, ensuring prompt remedial work.
The Act mandates the creation of a national, digital Private Rented Sector (PRS) Database to improve transparency and enforcement across England.
- Mandatory Registration: Every landlord of a privately rented property will be required to register both themselves and each property they let. This registration must be completed before a property can be legally marketed or let.
- Information: The database will hold key details, including landlord contact information, the address of the rented property, details of any letting agent used, and evidence of compliance with safety checks (Gas Safety, Electrical Safety, EPC).
- Accountability: The database will replace the fragmented "rogue landlord" registers, providing a single, national record. It will be used by enforcement bodies like Local Housing Authorities (LHAs) to target inspections and enforcement actions.
- Non-Compliance: Failure to register will result in civil penalties (fines) for landlords and may prohibit them from using the new Section 8 possession grounds to recover their property through the courts. Registration is also a prerequisite for mandatory membership in the new Private Rented Sector Ombudsman scheme.
To ensure compliance with the new standards and landlord obligations, the Act significantly strengthens the enforcement powers of Local Housing Authorities (LHAs).
- Increased Civil Penalties: LHAs are granted the power to issue substantial civil penalties (fines) to landlords for a wider range of breaches without the need for lengthy court proceedings.
- Initial or minor breaches (e.g., failing to register on the database, breaching the Decent Homes Standard, or attempting to misuse possession grounds) can incur a civil penalty of up to £7,000.
- Serious, persistent, or repeat non-compliance can result in a penalty of up to £40,000.
- Strengthened Rent Repayment Orders (RROs): The power for tenants to claim back rent from a non-compliant landlord is expanded and strengthened:
- The maximum amount of rent a landlord can be ordered to repay to a tenant is doubled from one year to two years' rent.
- RROs are extended to cover a broader list of offences under the Act, including the provision of false information on the PRS database.
- The order can now be made against a superior landlord in the rental chain, ensuring that those who benefit from the property are held accountable.
- Investigatory Powers: LHAs receive enhanced powers to demand information from anyone acting as a landlord or agent and to enter premises to investigate suspected breaches of housing law.
How the Elliot Leigh Guaranteed Rent Scheme Protects You
The extension of the Decent Homes Standard, Awaab’s Law, and the new mandatory PRS Database all create significant compliance obligations and serious financial penalties for those who fall short. For self-managing landlords, keeping pace with these requirements is both time-consuming and costly.
When you take out a Guaranteed Rent lease with Elliot Leigh, we assume full responsibility for your property’s compliance. Our in-house team manages all mandatory safety certifications Gas Safety, EICR, and EPC at no cost to you. We proactively address damp, mould, and hazard issues in line with Awaab’s Law timeframes, and we handle your registration on the Private Rented Sector Database. Our ISO 9001 and ISO 14001 accreditations demonstrate the rigour of our management processes. You remain the owner; we carry the compliance burden.
Landlord Responsibilities, Risks & Impact
The Renters’ Rights Act transforms the responsibilities landlords carry in the private rented sector.
Beyond changing tenancy structures, it redefines how landlords must operate from registration and compliance to record-keeping and communication.
Understanding your new duties is essential to avoid penalties and maintain a profitable, legally secure portfolio.
1: New Legal Responsibilities
The UK private rented sector is undergoing a period of significant legislative change, primarily driven by the Renters’ Rights Act. These reforms impose new duties on landlords, shifting the balance in favour of the tenant and requiring a proactive approach to compliance.
Landlords are now required to register on a new, mandatory national landlord database to demonstrate compliance with legal obligations. This administrative step is crucial for all private landlords, and non-compliance will carry a risk of civil penalties. Having all your property and compliance documents (such as safety certificates) in order is a prerequisite for successful registration.
New legislation strengthens requirements for property conditions, moving towards a legally defined "decent homes standard" for the private rented sector. Landlords must ensure properties are safe and well-maintained. This includes:
Maintaining up-to-date and easily accessible records for all property certification, including Gas Safety Certificates, Energy Performance Certificates (EPCs), and Electrical Installation Condition Reports (EICRs).
Complying with new safety and repair measures introduced under legislation like Awaab's Law, which imposes strict deadlines for addressing hazardous conditions.
New rules aim to foster more secure and equitable tenancies, fundamentally changing the relationship between landlord and tenant.
Abolition of Section 21: Landlords can no longer use 'no-fault' evictions. Possession must now be sought using the amended Section 8 grounds, which are statutory and must be proven in court.
Pets: Landlords are given a "right to request a pet," which a landlord cannot unreasonably refuse. Blanket bans on pets are no longer permitted, though the landlord can require the tenant to purchase pet insurance to cover potential property damage.
Ombudsman: A new Private Rented Sector Landlord Ombudsman will be introduced to provide a quicker, binding resolution service for tenant complaints, including disputes over pet requests or maintenance issues.
Compliance with various legislation now requires meticulous and long-term record keeping.
Tax Compliance: Landlords exceeding certain income thresholds will be mandated to keep digital records and submit quarterly updates to HMRC under the Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) program, starting from 2026/2027.
Legal & Financial Records: It is best practice to keep all tenancy agreements, safety certificates, maintenance invoices, and financial records for a minimum of six to seven years to satisfy requirements for tax investigations and to defend against potential tenant claims.
Tenancy Records: Detailed records of all communication and maintenance interactions with tenants are essential to support possession claims under the new Section 8 process.
It remains a legal obligation for all landlords (or their appointed agents) to conduct Right to Rent checks on all adult occupiers before a tenancy can begin.
Process: Checks must be conducted on all adults, regardless of nationality. For most UK/Irish citizens, a physical document check is used. For others, an online check using a Home Office 'share code' is the preferred method.
Discrimination: Checks must be carried out in a consistent manner for all prospective tenants to ensure compliance with the Equality Act 2010 and avoid unlawful discrimination.
Penalties: Failure to conduct the checks correctly or renting to a person without the legal right to rent can result in significant civil penalties (fines) and, in serious cases, a criminal conviction.
How the Elliot Leigh Guaranteed Rent Scheme Protects You
The new legal landscape demands that landlords actively manage registration, safety certification, fair tenancy procedures, and detailed record-keeping all while navigating a reformed Ombudsman scheme. For many landlords, this represents a step-change in the level of professional oversight required.
With Elliot Leigh, you don’t need to become a compliance expert. We register on the PRS Database on your behalf, maintain all required safety certificates, and handle all legal and administrative interaction with tenants. Our experienced team is already structured to meet every obligation introduced by the Renters’ Rights Act meaning you’re protected from day one, without having to change how you operate.
2: Operational and Financial Impact
New legislative and fiscal changes, such as the Renters’ Rights Act and the full implementation of Section 24 tax rules, are fundamentally reshaping the financial model of property investment in the UK. These changes increase operational complexity, reduce income predictability, and raise the cost base for landlords, leading to a significant shift in risk profile.
The abolition of fixed-term tenancies in favour of periodic (rolling) contracts is the primary driver of increased cash flow volatility.
Increased Void Risk: Tenants are now able to end their tenancy with only two months' notice, removing the income security previously provided by 6- or 12-month fixed terms. This can lead to higher tenant turnover and longer, less predictable void periods, directly impacting the regularity and stability of rental income.
Complex Possession Process: The abolition of 'no-fault' Section 21 evictions means landlords must now use specific Section 8 grounds to regain possession (e.g., selling the property, tenant arrears). This process is typically more complex and time-consuming, increasing the period a non-paying tenant may remain in the property, further exacerbating cash flow issues.
Legislation has imposed stricter limits on how and when landlords can adjust rents, constraining the ability to rapidly respond to rising costs or market demand.
Annual Limit: Rent increases are limited to a maximum of once per year, enforced via the Section 13 process, which requires at least two months' notice.
Tenant Challenge Rights: Tenants are empowered to challenge any proposed rent increase they deem to be above the market rate by appealing to the First-tier Tribunal (FTT). This introduces uncertainty and the potential for a lengthy dispute process, which can delay the implementation of a justified increase.
Banning Rental Bidding: The practice of rental bidding wars is banned, making it illegal for landlords or agents to solicit or accept offers above the advertised rent. This limits a landlord's flexibility to capitalise on high market demand.
The new framework restricts the financial demands landlords can make on prospective tenants at the start of a tenancy, limiting the use of larger upfront payments as a risk mitigation strategy.
One-Month Limit: The Renters' Rights Act introduces measures that prohibit clauses requiring tenants to pay more than one month's rent in advance before the tenancy agreement is signed and legally in force.
Impact on Risk: This change makes it harder for landlords to offset the perceived risk of tenants with limited financial history or those receiving benefits, as they can no longer mandate a large lump-sum payment (e.g., six or twelve months' rent) as a condition of the tenancy.
New regulatory requirements are set to significantly raise the cost of managing and maintaining rental properties, especially older stock.
Stricter Compliance: The extension of the Decent Homes Standard and the enforcement of Awaab's Law introduce mandatory remediation deadlines for hazards like damp and mould. This necessitates proactive maintenance schedules and non-discretionary spending to ensure legal compliance.
Rising Costs: Landlords are already grappling with sharp increases in the cost of property insurance, materials, and labour. This combines with the new legal requirements to compress profit margins and increase the financial provisioning needed to cover both routine and unexpected works.
Administrative Burden: The introduction of a mandatory Private Rented Sector Ombudsman and a landlord database increases the administrative and regulatory burden, potentially leading to higher management fees or internal compliance costs.
The profitability of the Buy-to-Let (BTL) model has been severely tested by a change in tax law and is now facing tighter financing conditions due to legislative changes in tenancy law.
Taxation (Section 24): The restriction of buy-to-let mortgage interest relief (Section 24) removes the ability of individual landlords to deduct mortgage interest and other finance costs from their rental income before calculating their tax bill. Landlords are now taxed on their gross rental income and can only claim a 20% basic rate tax credit on the interest paid. This has substantially increased the overall tax liability for higher-rate taxpayers, significantly reducing net cash flow and making highly leveraged properties less viable.
Financing Risk: The move to periodic tenancies and the complexity of the new eviction process are viewed as increasing lending risk. Some lenders have already responded by:
Tightening Affordability Tests: Requiring higher Rent Coverage Ratios (e.g., rental income needing to be a greater percentage of the mortgage repayment).
Adjusting Criteria: Potentially setting lower maximum Loan-to-Value (LTV) ratios and requiring larger financial reserves to cover the increased void risk.
How the Elliot Leigh Guaranteed Rent Scheme Protects You
Rolling tenancies, capped rent increases, one-month upfront payment limits, and rising maintenance costs all work together to compress landlord margins and increase cash flow volatility. The financial case for direct letting has become considerably harder to make.
The Elliot Leigh Guaranteed Rent Scheme eliminates the primary sources of that volatility. You receive a fixed, guaranteed payment every month whether the property is occupied, vacant, or undergoing repair. We cover all minor maintenance and repairs in-house. We cover utilities and council tax during any void periods between tenants. And because your lease is a corporate agreement rather than an AST, rent caps and Section 13 restrictions do not apply. Your cash flow is predictable, protected, and fully insulated from the operational pressures affecting the wider market.
3: Key Risks for Landlords
The combined effect of the Renters’ Rights Act and pre-existing fiscal changes has fundamentally altered the risk landscape for UK landlords, shifting the operational balance significantly in favour of tenants. The key risks now revolve around reduced income predictability, greater regulatory scrutiny, and increased financial exposure.
The abolition of Assured Shorthold Tenancies (ASTs) means all new and existing tenancies will convert to periodic (rolling) contracts.
Unilateral Flexibility for Tenants: This change removes the income security provided by fixed terms. Tenants gain the flexibility to terminate the contract with just two months' notice at any point.
Increased Void Risk: For the landlord, this results in a high risk of increased tenant turnover and less predictable income, as they must factor in potentially longer and more frequent void periods while arranging re-letting. This is a critical factor influencing cash flow modelling and mortgage affordability checks.
The removal of the 'no-fault' Section 21 eviction power significantly restricts a landlord's ability to swiftly regain possession of their property.
Reliance on Section 8 Grounds: Landlords must now rely on an expanded set of Section 8 grounds, each requiring clear evidence and legal due process. Grounds include serious rent arrears, anti-social behaviour, or the landlord needing to sell or move in.
Legal & Time-Consuming: The process of using Section 8 is typically more complex, lengthy, and expensive than serving a Section 21 notice, increasing the time a landlord must carry the cost of a non-compliant or non-paying tenant.
Re-letting Restrictions: If a landlord uses the ground to sell or move into the property, they are legally prohibited from re-letting the property for at least 12 months, which limits their options if circumstances change.
New safety and quality standards introduce mandatory and time-sensitive compliance obligations that raise the operational burden and associated costs.
Awaab's Law and Decent Homes Standard: The extension of the Decent Homes Standard to the private rented sector, coupled with new requirements under Awaab's Law (specifically targeting hazards like damp and mould), mandates stricter and faster remediation of maintenance issues.
Regulatory Framework: Landlords face a greater administrative load due to the mandatory registration of properties on a private rented sector database and required membership of a new, mandatory Private Rented Sector Ombudsman for dispute resolution. Failure to comply with these rules can result in penalties and prevent the use of possession grounds.
New legislation increases the financial strain on landlords through both taxation and the risk of litigation.
Tax Burden (Section 24): The restriction of mortgage interest tax relief means higher-rate taxpayers now face a significantly increased tax liability, as they are taxed on their gross rental income before the full deduction of mortgage interest. This change directly reduces net profits and cash flow.
Legal Costs: Landlords face legal exposure from a surge in rent disputes, as tenants are empowered to challenge any increase they consider above market rate via the First-tier Tribunal (FTT). The costs and delays associated with defending possession claims or rent appeals add financial risk.
Rising Costs: Increased maintenance expectations and soaring costs for services, labour, and insurance further compress profit margins, leaving less financial buffer for voids, repairs, or refinancing.
The new framework diminishes a landlord's control over who occupies their property and how it is used.
Bans on Discrimination: Landlords can no longer enforce 'blanket bans' against specific groups of prospective tenants, such as families with children or benefit claimants, limiting their ability to filter applicants based on their risk assessment.
Pets as a Right: Tenants are granted the right to request a pet, and landlords cannot unreasonably refuse. While they can require the tenant to purchase pet insurance to cover potential damage, this measure reduces the landlord's autonomy in setting tenancy conditions.
Reclaiming Property: The only remaining control over the tenancy's end is through the legally prescribed Section 8 grounds, replacing the landlord's previous ability to end the tenancy for any reason after the fixed term.
The cumulative effect of tax changes, rising costs, and reduced control has been identified as a catalyst for increased market volatility, primarily through a landlord exodus.
Portfolio Offloading: A significant number of landlords, especially those with smaller portfolios or high mortgage debts, have chosen to sell their properties to avoid the rising tax burden and compliance risk.
Impact on Supply: This wave of sales reduces the available housing stock in the private rented sector, which, while potentially supporting rent prices, contributes to market instability and reduces opportunities for professional investment, particularly in areas where housing supply is already strained.
How the Elliot Leigh Guaranteed Rent Scheme Protects You
The key risks identified in this section void periods, complex possession, rising compliance costs, reduced control, and financial exposure are precisely the risks that the Elliot Leigh Guaranteed Rent Scheme is designed to eliminate. Rather than managing each risk individually, our Corporate Lease model removes them at the source.
There are no void periods, because we pay regardless of occupancy. There is no possession risk, because your agreement is with Elliot Leigh not your tenant and operates under commercial lease law. There is no compliance burden, because we carry it. There is no rent tribunal exposure, because your rent is fixed by contract. Over 23 years and more than £500 million paid to landlords across London and Essex, we have built our model around exactly these protections. For landlords reassessing their risk profile under the new legislation, our scheme represents the clearest and most comprehensive solution available.
4: How Landlords Should Prepare
In the wake of legislative changes, landlords must pivot from a purely transactional approach to a proactive, compliance-driven, and highly professional one. Preparation is centered on mitigating the newly amplified risks of income volatility, maintenance liability, and legal exposure.
A comprehensive review of your property portfolio is the crucial first step to ensuring long-term financial viability under the new legal and tax framework.
Financial Stress Test: Recalculate your profit margins for each property, factoring in the full effect of Section 24 restrictions on mortgage interest relief and potential increases in operational costs and taxes.
Sell vs. Retain Analysis: Identify underperforming assets or properties that require significant capital expenditure to meet new standards. Determine if the long-term risk and reduced yield justify selling these properties before they become liabilities.
Leasing Structure Review: For properties that remain, analyse existing tenancy agreements to understand the transition to periodic contracts and the associated risk of increased tenant turnover and void periods.
The extension of the Decent Homes Standard to the private rented sector, coupled with tighter enforcement under Awaab's Law, mandates a shift towards superior property quality and maintenance.
Address Damp and Mould: Proactively identify and resolve potential hazards like chronic damp, mould, and excess cold. Failure to meet these new standards can lead to severe penalties and prevent a landlord from using Section 8 possession grounds.
Energy Efficiency: Use the audit to identify properties that require upgrades to improve EPC ratings, which will become a key factor in future compliance and tenant demand.
Scheduled Maintenance: Establish a rigorous, proactive schedule for all critical systems (heating, electrical, plumbing) to reduce the risk of emergency repairs and tenant complaints that could lead to disputes or non-payment.
Detailed and easily accessible records are no longer a best practice; they are a compliance requirement essential for legal defence.
Evidence of Compliance: Maintain a digital repository of all safety certificates (e.g., Gas Safety, EICR, EPC), insurance policies, and mandatory deposit registrations.
Dispute Readiness: All tenant communication, maintenance requests, and evidence of non-compliance (such as anti-social behaviour) must be meticulously logged and time-stamped to support any future Section 8 possession claim.
New Database Requirements: Prepare systems to facilitate mandatory registration on the upcoming Private Rented Sector Database.
The new legislation grants tenants greater rights and flexibility, making transparent and professional communication vital for retaining good tenants and managing disputes.
Rent Increase Transparency: Ensure that any proposed rent increases are clearly communicated, justifiable based on market rates, and served with adequate notice to reduce the risk of a tenant appeal to the First-tier Tribunal (FTT).
Managing Pet Requests: Establish clear, reasonable, and documented procedures for handling requests to keep a pet, including setting requirements for adequate pet insurance to cover potential damage.
Set Expectations: Clearly communicate maintenance procedures and response times to tenants to ensure their standards are met, helping to avoid issues that could lead to complaints or rent withholding.
Landlords must adjust their financial forecasting to account for new sources of expenditure and greater income uncertainty.
Factor in Voids and Legal Fees: Increase contingency funds to cover longer and more frequent void periods (due to tenants’ flexibility) and the increased legal costs and delays associated with pursuing possession via the complex Section 8 process.
Tax Reserves: Ensure adequate reserves are set aside to cover the higher tax liability resulting from the Section 24 changes.
Compliance Capital: Allocate a specific capital expenditure budget for necessary upgrades to meet the Decent Homes Standard, Awaab's Law, and any future energy efficiency targets.
One of the most effective ways to mitigate the entire spectrum of new risks is to transfer the day-to-day operational burden and financial risk to a professional management partner, such as a guaranteed rent scheme provider.
A scheme like the one offered by Elliot Leigh directly addresses the key landlord risks:
Eliminates Income Risk: They guarantee the rent payment on the same day every month , even if the property is empty (void periods) or the tenant is in arrears, providing 100% financial security.
Transfers Compliance Burden: The partner assumes the entire compliance load, including providing free Gas Safety Checks, Electrical Safety Tests, and EPCs. Furthermore, they ensure the landlord is compliant with all landlord obligations and legislative requirements.
Covers Maintenance and Refurbishment: They provide a fully managed service with 0% commission , offer 24/7 in-house maintenance , and carry out free minor repairs and refurbishments between tenancies.
Removes Administrative Hassle: The partner deals with all tenant-related issues and paperwork, and covers the cost of council tax and utilities during void periods , allowing the landlord to enjoy a hassle-free experience.
Long-Term Stability: Elliot Leigh offers long-term leases typically for 2-5 years, helping to mitigate market volatility and the instability of short-term periodic tenancies.
How the Elliot Leigh Guaranteed Rent Scheme Protects You
Every preparation step outlined in this section auditing your portfolio, improving standards, building digital records, adjusting your budget, and considering professional management is already handled for you as part of the Elliot Leigh Guaranteed Rent Scheme.
We carry out a free property valuation and compliance review before you sign. We manage all safety certifications, maintenance records, and database registrations throughout the lease. We cover the cost of refurbishments between tenancies and minor repairs throughout. And with leases running for 2–5 years, your financial planning becomes straightforward you know what you will earn, when, and for how long.
If the Renters’ Rights Act has prompted you to take stock of your property investment strategy, the most effective single step you can take is to speak to our team. Call us on 0208 983 4444 or use our rent calculator to get a guaranteed rent figure for your property today.
Guaranteed Rent: Your Protection Against the Renters' Rights Act
The Renters’ Rights Act introduces sweeping reforms from rolling tenancies to new compliance duties creating uncertainty for many landlords.
Elliot Leigh’s Guaranteed Rent Scheme removes that uncertainty completely.
We offer landlords a secure, fixed monthly income, full property management, and complete legal protection — all through our corporate lease model, which operates outside Assured Shorthold Tenancy (AST) legislation.
That means no exposure to Section 21 changes, rent caps, or possession risks just reliable income and professional management.
Security for your investment
How Our Guaranteed Rent Scheme Works
Considering the risks of Assured Shorthold Tenancies (ASTs) under evolving law like the Renters’ Rights Act, our scheme offers a secure alternative: you enter a Corporate Lease Agreement for up to five years, making Elliot Leigh your tenant, not the occupier. This commercial structure, signed with a regulated company, legally bypasses AST complexities and new tenant rights legislation, securing your rental income and offering the highest stability and certainty for your London & Essex property investment.
How much can you earn?
Calculate Your Rent
Frequently Asked Questions: Renters' Rights Act
What is the Renters Rights Act?
It replaces the former Renters Reform Bill and introduces major changes, including the abolition of Section 21 evictions, the end of fixed-term tenancies, the extension of the Decent Homes Standard, and the creation of a national landlord register.
When will the Renters' Rights Act become law?
Landlords are encouraged to start preparing now by reviewing tenancy agreements and ensuring property compliance.
What happens to existing Assured Shorthold Tenancies (ASTs)?
Landlords will no longer be able to set a fixed tenancy term, and tenants will be able to leave with two months’ notice.
Can landlords still evict tenants after Section 21 is abolished?
Valid reasons include selling the property, landlord occupation, persistent rent arrears, or serious antisocial behaviour.
Each ground will have its own notice period and evidential requirements.
How will rent increases work under the new law?
Tenants will have the right to challenge excessive increases through the First-tier Tribunal, which can review and adjust rent to reflect market levels.
What is the new Private Rented Sector Database?
All landlords will be required to register, ensuring greater transparency and accountability across the sector.
Failure to register may result in financial penalties or a rent repayment order.
What new standards will landlords need to meet?
Local authorities will have enhanced powers to inspect, enforce, and fine landlords who fail to comply.
How can landlords protect their income and reduce risk?
Because these leases operate outside Assured Shorthold Tenancy law, landlords are protected from income disruption, legislative changes, and void periods — while receiving guaranteed monthly rent and full property management support.