Recalibrating England’s rental market: The Renters’ Rights Act

New regulatory changes introduced on 1 May are set to reshape the private renting landscape in England, providing enhanced protections for tenants and a new set of rules which landlords will be required to adhere to. For the latter, the Renters’ Rights Act 2025 has been particularly significant, acting as a catalyst for many to reassess their property holdings.

All of this calls into question what the impact will be on the availability, flexibility and affordability of rental housing in the private property market. We have already seen property owners readying for the changes, pointing to a market that is becoming more cautious, more selective and in some cases more constrained.

Exiting the market

The first of these behavioural changes is the uptick in landlords re-examining their short- and long-term property plans. Where landlords had been considering disposals in the short-to-medium turn, the actions taken to secure vacant possession of the target properties have been accelerated. The main driver of this is not simply the removal of section 21, but the uncertainty that replaces it. While new grounds for possession, such as ground 1A for a sale of a property by a landlord, are being introduced, the four-month notice period raises practical questions that the market has yet to resolve.

Until there is clarity on how these provisions will operate in transactions, some landlords are choosing certainty where they can. That led to an increase in section 21 notices being served in advance of the new regime, bringing forward the date from which the tenant needs to vacate and for which the property will not be available for rent.

That question goes directly to housing availability. For some landlords, particularly those with smaller portfolios, other catalysts for change or shorter investment horizons, the 2025 Act may trigger a reassessment of whether to remain fully or partly in the sector. Others, especially those with long-term or generational holdings, are more likely to adapt. For them, the legislation represents another set of rules to navigate rather than a trigger for exit.

Working within the changes

That brings us on to our second shift, landlords changing how properties are used or let. Across landed estates and agricultural holdings, the 2025 Act is prompting a closer look at how residential occupation is structured alongside farm business tenancies and employment arrangements. Where housing is linked to employment, some landowners are considering service occupancy arrangements, embedding occupation within employment contracts rather than relying on traditional tenancies.

In the super prime urban markets, landlords are exploring the use of the resident landlord exemption, considering whether occupiers can be legally defined as lodgers rather than tenants.

These approaches are not new, but their increasing prominence is significant. Each represents a way of operating outside the core assured tenancy regime. The cumulative effect may be that a greater proportion of housing sits beyond the framework the 2025 Act is designed to regulate. A similar dynamic can be seen in the likely rise of common law tenancies. These arrangements are expected to become more widely used at both ends of the market, albeit for different reasons.

At the lower end, they offer flexibility. Where landlords require short-term occupation, for example during the grant of probate process, they may be willing to accept a lower rent in exchange for the ability to recover possession through a contractual break right. At the upper end, particularly in the super prime market, common law tenancies, which apply at high rents, allow landlords to retain greater control over how their properties are used, including contractual breaks and restrictions on tenants’ rights to have pets at a property.

Regaining some control

The common thread is a move towards structures that offer greater control and predictability. From an individual perspective, that is a rational response to a changing legal framework. From a market perspective, it introduces complexity.

The risk isn’t that the 2025 Act fails to improve standards; in many cases, it is likely to do so. The more nuanced question is how it affects supply. If landlords bring forward sales, reduce their exposure to the sector or shift properties into alternative occupancy arrangements, the pool of homes available under the mainstream private rented model may contract. At the same time, the experience of tenants may become less consistent. While many will benefit from stronger protections, others may find themselves in arrangements that fall outside the Act’s scope altogether.

None of this suggests that reform is misplaced. It does underline that legislation does not operate in isolation. Landlords with choice and flexibility respond, adapt and restructure as part of their wider medium- to long-term strategies, and it is those responses that ultimately shape the market.

The 2025 Act is already prompting that recalibration. The coming years will determine whether it delivers not only higher standards, but also a private rental market that remains accessible, functional and sufficiently supplied.

This article was first published in Estate Gazette