The Rental Reform Bill becomes Law

The big picture

There’s a sweeping reform underway in England’s private rented sector (PRS). The government has passed the Renters’ Rights Act 2025 (formerly the Bill) which is described as “the most significant reform in a generation”. The aim is to rebalance the relationship between landlords and tenants giving more rights and protections to tenants, and imposing more obligations on landlords. Many in the sector are already reacting: many landlords are warning of withdrawing from the market because of higher burdens and lower certainty.

For a boutique lettings/management agency like Smith & Ericsson serving prime London property, these changes mean two things: (1) landlords will need much more professional advice and management support, and (2) agents who position themselves as trusted advisors and compliance-partners will gain in credibility and value.

What is now law (and/or very close)

Here are key provisions that have passed (Royal Assent) or are firmly committed, and that landlords need to be aware of now:

• The Renters’ Rights Act received Royal Assent on 27 October 2025.

• Abolition of no-fault evictions under Section 21 of the Housing Act 1988 for most assured tenancies: landlords will not be able to simply serve a Section 21 notice and regain possession without a reason.

• Move away from fixed-term assured shorthold tenancies (ASTs) towards a periodic tenancy model.

• Limiting rent increases: landlords will generally only be able to increase rent once per year and tenants will have a route to challenge excessive increases at tribunal.

• Restrictions on rent in advance / lump-sum upfront payments: for example the Bill proposes (and now Act includes) prohibition of requiring more than one month’s rent up front (before tenancy) and preventing large lumps in advance.

• On the enforcement side: local housing authorities will have increased powers, including civil penalties (up to c. £7,000 for initial breaches) and up to £40,000 in certain serious cases.

• The extension of Awaab’s Law (originally social housing only) to the PRS: obligation to address hazards such as damp and mould within set time-frames (private sector extension via the Act).

• Bans on certain blanket tenant discrimination (e.g., refusing benefit-claimants or children) and rules about pets: the Bill (now Act) gives tenants greater rights to request a pet, and landlords must consider requests fairly.

  
  

What is still to come / implementation phases

A lot of the changes are legislated, but not all are fully in-force yet, and many require secondary legislation, regulations, guidance and commencement dates.

Landlords & agents must keep preparing. Key aspects still to fully land:

• Commencement dates: While the Act is in place, many of its provisions will only come into force at a later date (likely 2026 or beyond). For example, the new tenancy regime (no fixed term ASTs) will apply to both new and existing tenancies when the commencement order is made.

• Details of the Private Rented Sector Database and the Landlord Ombudsman/Redress scheme: These are required by the Act but the operational details (how registration works, fees, data flows) are still to be finalised.

• The full roll-out of Awaab’s Law time-frames for the private sector: The social housing side started 27 Oct 2025, but for private landlords the exact time-frames for compliance are still awaited.

• Possession grounds reform: The Act expands and modifies the usage of fault/non-fault grounds under Section 8 and Schedule 2 of the Housing Act 1988. Landlords will need to comply with new notice regimes and audit trails.

• Student and certain special tenancies: there are still special possession grounds (e.g., Ground 4A for student tenancies) that allow landlords more flexibility for student-let properties.

  
  

Why many landlords are considering leaving (and how agents can help)

Why landlords are concerned

• Loss of certainty and flexibility: Without the ability to serve Section 21, landlords cannot rely on easy early termination. They must rely on fault or specific possession grounds, which often means more time, cost and risk.

• More compliance burdens: More record-keeping, increased inspection/repair obligations (especially under Awaab’s Law), and higher potential fines for non-compliance.

• Potential increase in costs: Insurance, maintenance, legal, admin costs will rise. Some landlords may feel the risk/reward is shifting.

• Market impact: There is real concern that landlords will exit, reducing stock, pushing up rents, especially in high-demand markets like London.

• For students: If landlords can’t rely on long fixed-terms or advance lump payments, the attractiveness of student lettings may fall unless they go via guarantors/insurance.

  
  

How Smith & Ericsson can help

• Compliance-audit & gap-analysis: We offer landlords a review of their portfolio against the new obligations (e.g., tenancy types, inspections, data, property condition, landlord registration assumptions).

• Policy updates & documentation: Update tenancy agreements, inspection regimes, internal checklists, landlord/tenant communications to reflect new law (e.g., periodic tenancy wording, rent increase notices, pet permission clauses, advance rent limits).

• Insurance-review service: Advise landlords to review their insurance cover, with new obligations comes new risk.

• Landlord-education & communications: We prepare our landlords for changes: explain the obligations, timelines, risk of fines, and best practice.

• Tenant-product advisory: Given the barrier for students (e.g., advanced rent or guarantor schemes) agents can help we partner with guarantor firms.

• Portfolio repositioning: For landlords worried about “exiting the market”, we can help them assess whether to sell or convert properties (e.g., to short-lets) and the advantages/disadvantages given the regulatory shift.

  
  

What landlords must now do

Here’s a checklist of immediate steps for landlords

1. Review all tenancy agreements:

2. Document tenants, tenancies and compliance records:

3. Ensure properties meet condition/repair obligations:

4. Review insurance cover:

5. Budget for increased compliance/maintenance costs:

6. Communicate with tenants proactively:

7. Work with your agent (or upgrade your management service):

   
   

Insurance & Fines – What landlords must know

Fines / Civil penalties

• Local housing authorities will have broader powers to issue civil penalties up to £7,000 for certain breaches (initial non-compliance) and a maximum up to £40,000 for serious or repeated offences.

• Also, under the “right to rent” scheme, fines have surged – more than £4.2 m in recent period for illegal renting. While that’s separate from these reforms, it signals that enforcement is stepping up.

  
  

Insurance – what to check

• Insurance policies should explicitly include legal expenses cover for regulatory enforcement (civil penalties, defence costs).

• Consider property damage risks from mould/damp/hazards: since Awaab’s Law will expand to PRS, landlords could face liability for health-related issues. Check whether your insurance covers latent defects/tenant injury.

• Given that tenancy types and payment structures may change (e.g., less upfront rent) the liquidity risk for rent default may shift: review rent guarantee insurance or alternative risk management.

  
  

Our message to landlords: Don’t panic

Change is never easy but it’s not the end of the world. Despite the noise in the press, most landlords are not the villains they’re made out to be. The vast majority simply want to provide good homes, follow the law, and have respectful, long-term tenants who pay their rent on time.

The new rules will take some getting used to, but with the right guidance and management support, the transition can be smooth and even beneficial. Agents like Smith & Ericsson exist precisely to make this easier, helping landlords stay compliant, protect their investments, and keep good tenants happy.

Remember:

• This is an adjustment, not a collapse. The market will stabilise as landlords and tenants find their rhythm in the new framework.

• Long-term tenancies aren’t a bad thing. Having a reliable tenant with an annual RPI-linked rent increase can mean steady income, less void time, and lower stress.

• You can still regain possession. Whether you need the property back to sell or move in yourself, the law still allows it, it just requires the proper process and notice.

• Capital gains still matter. In a market like London, long-term capital growth remains a strong incentive to hold property.

  
  

So don’t panic. We’ll adapt, as we always do. The fundamentals of good property management remain the same: keep your property in good condition, treat tenants fairly, and stay compliant. Do that and with experienced partners like Smith & Ericsson by your side you’ll be in a strong position for whatever comes next.