What is the Renters' Rights Bill?.

If you’re a landlord, you’ve probably been hearing noises for the past few years about some sizable changes coming to the private rental market.

And, whilst some people may have thought the day would never arrive, many of the measures first introduced as part of the 2019 Renters’ (Reform) Bill are set to pass into law in the Renters’ Rights Bill in Summer 2025.

So, what’s in the Bill, what effect could it have on the Buy to Let market, and how will landlords need to adapt in 2025 and beyond? Read on to find out.

What’s in the Renters’ Rights Bill?

The Bill includes many new policies designed to give renters in England more protection against rising rents and substandard conditions. Here are some of the key measures:

The abolition of Section 21 evictions

This regulation looks to end ‘no-fault’ evictions, where a private landlord can serve notice on a tenant without needing a reason. If a landlord has a good reason to regain possession of their property, they will need to use a Section 8 notice instead.

Section 8 notices require landlords to prove that the tenant has breached at least one of the mandatory grounds for eviction, and it can be costly if mistakes are made when filling out the required form (Tenancy form 3). However, the new Bill also introduces additional grounds for a landlord to evict and revises several existing reasons so they’re easier to understand.

An end to fixed term assured shorthold tenancies (ASTs)

All tenancies will become periodic, rolling terms instead of fixed terms, including existing ones. This means that tenants will only need to provide two months’ notice to end their tenancy.

For example, renters that find themselves in sub-standard housing won’t be locked into annual or multi-year contracts that will be costly to leave. In this case, the rule change will put the emphasis back on landlords to make sure their property is well-maintained, and any repairs are completed in a timely manner.

A limit on the amount of rent increases

Landlords will only be able to increase the rent on a property once a year. Additionally, the increase cannot exceed the market rate that the property would achieve if it was newly advertised for let.

A limit on rent paid in advance

Landlords can only ask tenants for one months’ rent in advance once a tenancy agreement has been signed. This will help to stop landlords asking for large amounts of rent upfront to secure the property, as the practice can stretch a tenant’s finances or prevent them from accessing a place to live.

The creation of a landlord ombudsmen and database

Tenants will be able to use a new, free service to register complaints they have against their landlord. The new ombudsmen, which all private landlords must join by law, will be able to force landlords to provide information, take remedial action, and pay compensation.

Additionally, all private sector landlords of assured and regulated tenancies will be legally required to register themselves and their properties on a national database. For landlords, the database will allow them to access relevant guidance and ensure that they are easily notified of any changes to regulations they need to know about. Tenants will also be able to view information on prospective landlords before and during tenancies, protecting them from unscrupulous or criminal landlords.

How will the changes affect the Buy to Let market?

Some industry commentators have been quick to suggest that the new regulations will force landlords to leave the profession, creating even fewer affordable properties for renters.

But, at Together, we’ve seen that landlords have adapted to numerous challenges over the past few years, including changes to EPCs and taxation. So, whilst some landlords are selling up, many landlords realise that letting out a property is still a valuable and secure long-term investment.

In fact, the move to a more professional, accountable and service-driven model could benefit landlords looking to expand in the following ways:

• More Buy to Let properties on the market – Portfolio landlords could see the opportunity to snap up more rental-ready properties in their area as some smaller individual and accidental landlords look to exit the market.
• A reputational increase for the profession – The small number of dishonest and low-effort landlords will see their opportunities and profits decrease, and their obligations rise, potentially driving them out of the industry. This should lead to fewer rental horror stories, such as mouldy properties or exorbitant rent increases, that can negatively affect how the profession is perceived by the public.
• Fewer voids – Landlords who provide good-quality properties to rent at reasonable market rates will be more in demand. This could potentially lead to longer tenancies and shorter void times where the property is empty.

What support do landlords need from lenders?

Proving affordability is often a major sticking point for mortgage applications, and Buy to Let applications are no exception. Without the strength of an AST agreement, which effectively guarantees rent over a specified period, landlords may start to find it even harder to accurately forecast their income.

But it doesn’t need to lead to more rejections. Lenders will need to look at reshaping how they calculate interest cover ratio (ICR) if they want to support their private rental sector customers.

At Together, we already apply a common-sense approach to affordability, looking at an applicant’s full income. This can include top slicing, where we can use the applicant’s personal income alongside rental income to show that they can cover the mortgage repayments.

Additionally, landlords can access some of the built up equity in their personal or portfolio properties to fund a new purchase with a second charge loan.

Are you finding it harder to get approved for finance? Speak with our team to find out if we can help you achieve your Buy to Let property ambitions.