Renters' rights and the UK's living sectors
INTRODUCTION
The Renters' Rights Act passed into legislation on 27 October 2025. Although there is general relief that the ambit of the new regime has been finalised, landlords are poised to find out the timetable for introducing the various aspects of the new rules, and the terms of the secondary legislation which will fill in the missing details. Our last briefing gave an overview of the new legislation - this briefing will explore what it could mean for the UK's living sectors.
BUILD-TO-RENT
Landlords in the BTR sector generally let flats on assured shorthold tenancies, so will be squarely within the new regime. Their key concerns will be:
2.1 the costs and frustration of delays in obtaining vacant possession under the section 8 procedure, because the courts will quickly become overwhelmed with the volume of cases;
2.2 difficulties increasing rents because, under the new regime, tenants are effectively incentivised to dispute any proposed rental increase as:
2.2.1 in order to bring a dispute, tenants can simply disagree with the proposed rent figure i.e. no market data is required on the part of the tenant; and
2.2.2 even if the tenant's challenge to the proposed rental increase is unsuccessful, the level of rent determined by the tribunal will take effect from the date of the tribunal's decision (rather than the date the rent would have increased, but for the dispute raised by the tenant).
2.3 increased management costs due to the uptick in regulatory requirements, the inability to recover damages caused by pets that (together with other breaches) exceed the standard 5-week deposit, and potentially more void periods because of the inability to agree minimum periods with tenants; and
2.4 greater regulatory risk– it is not yet known or understood how the new Ombudsman will operate, what information the new PRS database will require from landlords, or how (cash-strapped) local authorities will exercise their new powers to fine landlords who are in breach of the regime.
Institutional landlords will be better able to withstand these risks than non-professional landlords, but the new regime will require some immediate investment in terms of adapting systems and procedures to cope with the new rules, and will also be more costly for landlords over the long-term because of increased uncertainty and greater regulatory costs.
STUDENT ACCOMODATION
3.1 University-owned halls
Students who live in university-owned halls will not be affected by the new regime, because they usually occupy under licence agreements or educational tenancies rather than assured shorthold tenancies.If assured shorthold tenancies are used for university-owned halls, it is likely the exemption summarised at 3.2 below will apply.
3.2 Purpose-built student accommodation operated by institutional landlords
Under the new legislation, a letting will not be an assured tenancy (and will therefore fall outside the regime) if it meets the following criteria:
- It is a tenancy granted to a full-time student (or a person intending to study full time) at a 'specified educational institution'; and
- It was granted by a 'specified educational institution' or by a 'specified body of persons', or by an agent acting on behalf of the landlord who is a member of a 'specified housing management code of practice'.
Secondary legislation will be needed to clarify what is meant by these expressions, but it is understood that this is intended to exempt some Purpose-Built Student Accommodation (“PBSA”) from the regime. It also remains subject to confirmation which universities and other higher education providers will be "specified educational institutions".
Lettings that fall within this exemption will be classed as common law tenancies, meaning that landlords can continue to grant fixed term tenancies with a break clause, and need not protect their tenancy deposits in government-approved schemes.
It is thought that PBSA tenancies that are in place when the Act comes into force will become assured periodic tenancies like all other ASTs, but that these landlords will be able to terminate them under the new student housing possession ground 4A described at paragraph 3.3 below.
3.3 Other types of student accommodation
Lettings that fall outside the exemption described at paragraph 3.2 above will become assured periodic tenancies, in the same way as lettings in the BTR sector. However, landlords of some student properties will be able to benefit from a new ground for possession, Ground 4A, whereby landlords can repossess the property to let it to another group of full-time students the following year. The qualifying conditions are as follows:
- the property must be an HMO, meaning a property occupied by at least three tenants who do not form a single household, and share amenities like a kitchen, bathroom, or toilet;
- it must be let wholly to full-time students;
- the tenancy was not granted more than six months before its term commencement date;
- the landlord must serve written notice on the tenants within 28 days of the date when the tenancy became an assured periodic tenancy, warning them that it plans to recover possession under this ground; and
- the landlord must also serve 4 months’ notice on the tenants, specifying a date from June to September when the landlord wants the students to move out. However, an unfortunate quirk of the new regime is that the students will be able to give two months’ notice to the landlord at any time to bring it to an end, possibly leaving the landlord with a void property until the next academic year.
Properties which do not meet these requirements, such as one or two-bed flats let to students, or HMOs in which one or more students is on a part-time course, will not be able to rely on Ground 4A.
RETIREMENT HOUSING
There are a range of forms of tenure in this sector, including long leases granted for a premium, and various forms of short letting including licences and common law tenancies as well as ASTs. The Act does not contain any provisions expressly tailored to retirement accommodation, meaning that the same concerns apply to any ASTs granted to tenants in this form of housing as for BTR, explored at paragraph 2 above.
Note that landlords in this sector may be able to make use of one of the following new grounds for possession, both of which require 4 weeks' notice from the landlord:
- Ground 5F: supported accommodation intended for use where a property is let as supported accommodation (e.g. care, support, or supervision), and the tenant’s circumstances have changed, making the accommodation no longer suitable; or
- Ground 18: supported accommodation, for use where the tenant is in supported accommodation and is unreasonably refusing to engage with the support services provided.
The range of tenures in the retirement housing sector includes shared ownership structures. This is where the buyer buys a certain percentage share of a property and rents the remainder of the property from the landlord. Following the judgment in Richardson v Midland Heart Limited [2007], any shared owner is treated as an assured tenant under the Housing Act 1988, meaning that landlords could serve a Section 8 notice on a defaulting owner (and its lender). Under the new regime, shared ownership leases of more than seven years will no longer be classed as ASTs. This means that their landlords will no longer be able to serve a possession notice under the Housing Act 1988, and will instead have to go through the court or tribunal to get a determination that there has been a breach of lease and then eventually start forfeiture proceedings. This will be a more costly and lengthy process.
CONCLUSIONS
Landlords in the UK's living sectors will need to commit time and resources to prepare for the implementation of the new regime and this exercise should be undertaken sooner rather than later. Despite the Renters' Rights Act being the most significant reform to the PRS for around 30 years, it is anticipated that there will only be a six-month transition period before the new regime (including the new penalties for non-compliance) is introduced. We will publish further updates as more becomes known about the Government's plans and timeframes.
