The Renters’ Rights Act is set to come into force in May, and it represents one of the most significant shifts in the UK rental market in decades. For mortgage advisers and brokers working with landlord clients, understanding these changes is essential.
What is changing?
The headline change is the abolition of Section 21 — the mechanism that allowed landlords to evict tenants without giving a reason. From May, landlords will only be able to evict tenants on specific grounds, such as non-payment of rent, antisocial behaviour, or because the landlord intends to move into the property themselves.
Beyond evictions, tenants will gain the right to challenge any rent increase they consider unreasonable at a property tribunal. Bidding wars are also being banned, with landlords and letting agents no longer permitted to solicit multiple offers on a property.
How are landlords responding?
The industry has seen a sharp increase in Section 21 notices being served before the deadline. Landlord Action, a firm specialising in housing law, has reported a 62 per cent increase in eviction instructions year on year. Some landlords are moving to sell, redevelop, or relet properties on different terms before the new rules take effect.
There are also signs of landlords shifting away from the mainstream private rental sector entirely, with growing interest in guaranteed rent deals where properties are signed over to councils for use as temporary accommodation or social housing.
The compliance burden
Landlords who fail to comply with the Act face financial penalties. For example, failing to send tenants the required Renters’ Rights Act Information Sheet could result in a £7,000 fine. Additional penalties apply for failing to address issues such as mould and electrical risks.
The Ministry of Justice has acknowledged that the changes will place additional pressure on the courts system, and has said it is working to strengthen capacity, including hiring more judges.
What this means for mortgage advisers
For brokers and advisers, the practical implications are significant. Small-scale landlords — who make up 83 per cent of the private rental sector — are most exposed to the rising complexity and costs that come with these changes. Those with one or two properties, particularly accidental landlords who inherited a property or could not sell, may find the new regulatory environment difficult to navigate.
This creates both a challenge and an opportunity. Advisers who can guide their landlord clients through remortgage decisions, portfolio restructuring, or even exit strategies will add genuine value. Understanding how the Act affects rental yields, void periods, and the cost of compliance will be increasingly important when advising on buy-to-let lending.
Will rents go up?
There is a real concern that the new regulations will lead to higher rents. If landlords are repricing risk to account for longer eviction processes, increased compliance costs, and the potential for tribunal challenges, those costs are likely to be passed on to tenants. The irony of tenant protection legislation driving up rents is not lost on the sector.
That said, the widely predicted mass exodus of landlords has not fully materialised. Falling property prices, particularly in London, appear to have kept some landlords in the market who might otherwise have sold.
The bottom line
The Renters’ Rights Act is not going away, and its effects will ripple through the mortgage and property markets for years. Whether you are advising landlords on their next mortgage, helping them understand their obligations, or supporting clients who are considering exiting the sector, staying ahead of these changes is critical.
The advisers who understand this legislation and can translate it into practical guidance for their clients will be the ones who stand out.
