Essential Landlord Briefing: The Renters’ Rights Act 2025 – A Critical Update

What is the Timeline?

While the Bill has received Royal Assent, the changes will not all come into force immediately. Implementation will be staged via secondary legislation, with the most significant changes expected to take effect from mid-2026.

• Initial Changes (Late 2025): Changes related to local authority enforcement powers and anti-discrimination rules are expected to be among the first to take effect.
• “Commencement Date” (Likely 2026): This will be the “big bang” date when the new periodic tenancy system begins, the Section 21 ban comes into force, and the updated Section 8 grounds apply.

Key Changes You Need to Know

The core of the new legislation is a shift in the legal relationship between landlord and tenant. Here is a summary of the most significant changes.

1: Abolition of Section 21 & New Tenancy Structure

• End of “No-Fault” Evictions: Section 21 notices will be abolished. Landlords will no longer be able to regain possession without a specific, legally defined reason (a “Ground for Possession”).
• Periodic Tenancies: Fixed-term assured shorthold tenancies (ASTs) will be replaced by a new system of assured periodic tenancies. All new and existing tenancies will become open-ended, allowing tenants to leave with two months’ notice at any time.

2: Updated Grounds for Possession (Section 8)

To address the removal of Section 21, the existing Section 8 process will be strengthened and expanded. New mandatory grounds will include:

• Selling the Property: Where the landlord intends to sell (must be a genuine intention).
• Landlord or Family Occupation: Where the landlord or their close family intends to move into the property.
• Important Note on Arrears: The mandatory ground for serious rent arrears (Ground 8) will be adjusted, requiring a tenant to have at least three months of rent arrears (up from two) at both the time of serving notice and the court hearing. The notice period for this ground will increase to four weeks.

It is not mandatory to take a tenant to court every time you issue a Section 8 notice.

• Tenant Compliance: Just as under the current rules, if a landlord or agent serves a Section 8 notice and the tenant vacates the property by the end of the specified notice period, no further action or court application is necessary.
• Court Application: A landlord will only need to apply to the court for a possession order if the tenant refuses to leave after the notice period has expired.
• Likely Scenarios: Court action is more probable when seeking possession for grounds relating to rent arrears or anti-social behaviour. In these cases, the landlord may also choose to use the court process to claim compensation for outstanding rent or associated costs simultaneously.

3: New Rules on Rent & Payments

• Annual Increases Only: Landlords will be restricted to increasing rent once per year. This must be done using the formal Section 13 notice procedure.**(See note below).
• Tenant Challenge: Tenants will have the right to challenge excessive rent increases at a First-tier Tribunal (FTT).
• Banning Bidding Wars: It will be illegal for landlords or agents to solicit or accept offers above the advertised rent.
• Advance Payments: Landlords cannot demand or accept more than one month’s rent in advance before the tenancy agreement is signed.

**Under the new legislation, all rent increases must be executed using the formal Section 13 notice procedure and will be limited to once per year. If a tenant challenges the proposed increase at the First-tier Tribunal (FTT), they are legally required to continue paying their existing rent until a decision is made. The FTT will determine the market rent, which is calculated based on what the property could achieve if returned to the market. Crucially, if the FTT rules that the landlord’s proposed increase was justified, the tenant will be liable to backdate the missed rent payments to the date the increase was initially scheduled to take effect.

4: Mandatory Landlord Obligations

• Decent Homes Standard: The new Act extends the Decent Homes Standard and Awaab’s Law to the private rented sector, mandating that properties meet specific safety and quality standards and that hazards (like damp and mould) are dealt with promptly. Landlords must ensure their properties meet the specific safety and quality criteria set out in the DHS. Local councils are empowered to monitor compliance with regulations. If a property breaches the DHS, the council can issue an improvement notice requiring the landlord to rectify the issues within a set timeframe. Failure to meet the DHS after an improvement notice could result in a fine of up to £7,000 for a first offence, rising to £40,000 for repeat offences, or a Rent Repayment Order, where the landlord may be forced to repay rent to the tenant.
• Right to Request a Pet: Tenants will have an implied right to request to keep a pet, and landlords cannot unreasonably refuse consent. Landlords may require tenants to take out pet insurance to cover any potential damage.

5: National Database & Ombudsman

• PRS Database: All landlords and their properties will be required to register on a new Private Rented Sector (PRS) Database.
• Mandatory Redress: Landlords will be required to join a new PRS Landlord Ombudsman scheme, providing an impartial resolution service for tenant disputes and offering an alternative to court.

What is the Landlord’s Ombudsman?

The Renters’ Rights Act requires all landlords to join a new Private Rented Sector (PRS) Landlord Ombudsman scheme.

• Compulsory Membership: Membership will be mandatory for every landlord, even if your property is managed by an agent who is already a member of a separate redress scheme.
• Purpose: This new scheme is intended solely for resolving disputes between landlords and tenants, running in parallel with existing schemes that cover letting agents and property management. It provides tenants with an impartial, non-court route to escalate complaints.
• Timeline: The government aims to establish this service shortly after the legislation receives Royal Assent. Landlords will be notified and given time to sign up before membership becomes a legal requirement.

This change is designed to enhance professionalism and provide a fairer, faster, and more cost-effective resolution process for disputes, benefiting both landlords and tenants.

A Level Playing Field: The Ban on Rental Discrimination

The Renters’ Rights Act 2025 introduces vital provisions to prevent unlawful discrimination in the private rented sector, reflecting the government’s intent to create a fairer market. This change mandates that landlords and letting agents in England cannot engage in discriminatory practices against prospective tenants based on whether they have children or receive benefits (often referred to as ‘No DSS’ policies).

What is Now Unlawful? The legislation makes it illegal to apply discriminatory conduct, both explicit and indirect, at any stage of the letting process. This includes:

• Explicit Bans: Advertising or enforcing outright bans such as “No DSS” or “No Children.”
• Indirect Practices: Requiring higher deposits, larger advance rent sums, or other measures that are not applied to tenants without children or not in receipt of benefits.
• Restricted Access: Preventing someone from enquiring about, accessing information on, viewing the property, or signing a tenancy agreement based on having children or claiming benefits.

Key Protections and Exemptions

• Children: The ban prevents restrictions on letting properties based on a child (under 18) living with or regularly visiting a person at the property.
• Benefit Claimants: The law protects any person who is claiming, or may be claiming, statutory social security payments or receiving Council Tax reduction.
• Right to Reference: Landlords and agents reserve the right to conduct referencing checks based on affordability and sustainability for all parties. The decision to let must be based on these factors, not on the presence of children or receipt of benefits.
• Exemption for Insurance: Properties under an existing insurance policy that contains a restrictive clause (in effect before the legislation commenced) will be exempt until that specific contract ends or is renewed. New restrictive clauses in insurance or mortgage agreements are rendered void.
• Legitimate Aim Exception: Discrimination is permitted where there is a “proportionate means of achieving a legitimate aim,” such as refusing to let to a family because it would lead to statutory overcrowding.

Enforcement and Penalties

Local authorities are empowered to enforce this ban by imposing Civil Penalties (fines) on landlords and letting agents for breaches.

• Fines: Penalties can reach up to £7,000 per breach.
• Continuing Breach: If the discriminatory conduct persists for 28 days after an initial fine is issued, further penalties may be imposed.
• Appeal: Landlords and agents have the right to appeal any financial penalty at the First-tier Tribunal.

This marks a significant move toward a more inclusive and professional rental market, and Crown Luxury Homes is committed to ensuring full compliance across your portfolio.

Next Steps for Crown Luxury Homes Landlords

At Crown Luxury Homes, we believe this legislative change presents an opportunity to further professionalise and enhance the quality of the private rented sector. We are already proactively engaging with leading industry bodies, including Propertymark and the National Residential Landlords Association (NRLA), to ensure we are fully prepared and can provide you with best-in-class guidance throughout this transition.

Here are the immediate steps we recommend you take to safeguard your investment:

• Elevate Property Standards: The Decent Homes Standard is on the horizon. This is the perfect time to review your property’s condition and address any outstanding repairs. Proactive, high-quality maintenance is now more crucial than ever to ensure compliance and prevent potential disputes in the future.
• Master the New Grounds for Possession: With the end of Section 21, you must familiarise yourself with the updated mandatory grounds for possession. Understanding the legal basis for regaining your property—particularly the grounds relating to selling the property or landlord/family occupation—is essential, as these will be your primary routes (outside of tenant breach).
• Stay Informed on Compliance: As the detailed regulations emerge, we will be in close contact with specific guidance on joining the mandatory PRS Landlord Ombudsman scheme, registering your property on the new PRS Database, and managing the practicalities of the ‘right to request a pet’ clause. We’re here to guide you through every new requirement.

The Renters’ Rights Act 2025 demands a professional and compliant approach to property management. Crown Luxury Homes is committed to supporting you through this transition to minimise disruption and maintain the value of your investment.