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On 28 October 2025, the Renters’ Rights Act 2025 was granted Royal Assent.
Described by the Secretary of State for Housing, Communities and Local Government as a means of “…tearing down the walls of injustice in the private rented sector …” the Act is the most transformative piece of legislation to hit the statute books for decades.
Here, we look behind the headlines and summarise the main changes to the law for both landlords and tenants before implementation of the Act’s key provisions (on a date which is still to be confirmed).
The end of assured shorthold tenancies (ASTs)
Assured shorthold tenancies have been consigned to history. Since 1989, this type of tenancy has been the default method of letting residential property in England & Wales. The key concept of the AST was flexibility for landlords. However, the contractual term of the tenancy could be fixed, after which they could be terminated on two months’ notice and without specifying a reason.
Assured periodic tenancies will be the new normal. There will be no fixed term tenancy of residential premises – all new tenancies will be periodic (i.e. they will have no end date) with the period of the tenancy not exceeding one month. The Act will also convert existing ASTs to periodic tenancies automatically (on the implementation date).
The end of “no-fault” evictions and Section 21 of the Housing Act 1988
Section 21 of the Housing Act 1988 will be abolished. This is the flagship change, because Section 21 enabled the so called “no fault eviction”. Provided certain procedural requirements were met (e.g. proper treatment of tenancy deposits), tenants would have no defence to a landlord’s claim for possession of their rental property, even if it had been their home for several years.
Section 7 of the Housing Act 1988 will now become the sole basis for all orders for possession of residential property in England & Wales. To obtain an order for possession, landlords must first serve a notice under Section 8 of the Housing Act 1988. That notice must refer to one or more of the permitted grounds in Schedule 2 of the (1988) Act, which must then be proved at the possession hearing before an order can be made.
Some grounds will change once the Act is fully implemented. Significantly, Ground 8 of Schedule 2 (which mandates an order for possession on the basis of rent arrears) will now require the tenant to be at least in three months’ arrears (up from two months) before an order is made. The notice seeking possession on Ground 8 must specify a notice period of 4 weeks (up from two weeks). Landlords will be able to rely on new grounds of possession in Schedule 2 if they intend to live in or sell their properties. However, proving intention for claims for the possession of property is already a highly litigious area.
In short, there is no longer any certainty that a court will make an order for possession for property that is let on an assured periodic tenancy. It is also unclear how, or even, if the courts will cope with a significant increase to what is already an exceptionally busy caseload of residential possession claims.
Statutory control of rent increases
Rent increases were commonplace for ASTs. Section 13 of the Housing Act 1988 already contain provision for rent increases to be challenged in the First-tier Tribunal (“FTT”). However, the process was rare, because it did not apply during the initial fixed term of the tenancy and the landlord had the option of serving notice (under Section 21) to bring the tenancy to an end once the fixed term had expired. Typically, a new fixed-term tenancy would then be offered at a higher rent. The tenant could either “take it or leave it”.
Landlords’ ability to increase rents will be tightly controlled due to the changes that the new Act will soon introduce. The statutory controls will apply in all cases, because there will no longer be a fixed-term assured shorthold tenancy.
Advance notice of an intended rent increase will now be required, and tenants will have the option of challenging the increase in the FTT. It is likely that many tenants will take the opportunity to challenge potential increases of rent, particularly in the current economic climate. That would increase the workload of the FTT quite significantly and could result in long delays.
Automatic break rights for tenants
No automatic break rights was the default position for ASTs. If either the landlord or tenant wanted the option of ending the tenancy within the initial contractual term, the tenancy agreement would need to contain a specific “break right/option” to that effect. In addition, any break notice served by the landlord would have to comply with the provisions of Section 21.
Automatic break rights will now be a key feature of the new statutory regime, but only for tenants who will now have the right to bring the tenancy to an end at any time, on just two months’ notice. Conversely, landlords will have no right to bring the tenancy to an end, unless one of the Schedule 2 grounds for possession apply. Even then, the court will have discretion as to whether to make an order for possession in all but the most serious cases of rent arrears.
In short, the new Act offers tenants complete freedom to leave their rental accommodation on short notice. Conversely, the Act places tight constraints on the landlord’s rights to recover possession of their properties (which will, inevitably, have to be enforced through litigation in many cases).
Comment
The Renters Rights’ Act 2025 represents a generational shift in landlord and tenant law.
It is no exaggeration to say that the private rental sector in England & Wales is unlikely to ever be the same again.
The policy behind the Act is clear and it is undoubtedly good news for tenants. They will now enjoy the dual benefit of having the certainty of an open-ended tenancy with limited options for termination by the landlord on one hand, plus the flexibility of being able to terminate their tenancy at short notice on the other. Other positive changes for tenants include the widening of statutory control over rent increases (as discussed above); limiting the landlord’s ability to prohibit pets from rental accommodation; a new redress scheme for dealing with tenancy complaints; the creation of a new private rented sector database; and, provisions to extend the Decent Homes Standard to the private sector.
What is less clear, however, is how landlords will react to such a dramatic reversal of a legal framework that had previously been based on flexibility and freedom to contract. Many commentators believe that the number of rental properties will reduce (with a consequential increase in rents) as many landlords conclude that risks of letting outweigh the benefits. Time will soon tell.
What is certain, however, is that the Act will bring about an increase in litigated claims for possession of residential property, together with an uptick of claims for determination of rent reviews in the First-tier Tribunals. The new grounds of possession that require proof of landlord intention (e.g.to sell or occupy the property) have direct parallels with a heavily litigated area of law involving commercial leases, and that may dissuade many would-be landlords (particularly those who were planning on letting their properties for short periods).
The Act introduces a new mandatory ground of possession for employment-linked accommodation, but it is subject to the condition that the landlord must intend to let the property to a new employee, which may be similarly difficult to prove.
The risk of increased (and more complex and costly) litigation will also be of interest to insurers and underwriters who currently provide landlord indemnity and/or legal expenses insurance which cover residential possession claims.
This is, as the saying goes, only the beginning. We will be exploring the changes introduced by the Act (including the litigation risks) in more detail in a future serious of articles, as well as tracking the implementation date of the key sections.
If you would like specific advice on how the Act is likely to affect your property or tenancy, please contact a member of our Real Estate Litigation Team, who will be happy to help.
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