LODGE: A Living Sector Update Winter 2025
Renters’ Rights And Build To Rent: Top 5 Key Changes Operators And Investors Need To Know About
By Laura Bushaway and Lauren Fraser
LODGE: A Living Sector Update Winter 2025
Renters’ Rights And Build To Rent: Top 5 Key Changes Operators And Investors Need To Know About
By Laura Bushaway and Lauren Fraser
The Renter’s Rights Bill is the largest legislative change to the private rented sector for over 35 years. On 27 October 2025, the Bill received Royal Assent and the Government has announced a phased implementation from 1 May 2026 (“the Commencement Date”).
The Act will mean that it is no longer possible to let residential properties on a fixed term Assured Shorthold Tenancy (“AST”). After the Commencement Date, all existing ASTs will be converted to monthly assured periodic tenancies and new tenancies granted after that date will also be assured periodic tenancies. This means that there will no longer be any certainty of how long a tenant is planning to stay at a property. In the Build to Rent sector where occupancy levels are used to calculate the viability of investment opportunities/return, this may lead to greater financial uncertainty.
Operators And Investors Of Build To Rent Accommodation Should Be Aware Of The Top 5 Key Changes In The Act:
Operators and investors of Build to Rent accommodation should be aware of the top 5 key changes in the Act:
1
More Arrears Are Required Before An Order For Possession Can Be Sought
Under the current regime, one of the grounds enables a landlord to serve a Section 8 Notice if both at the date of service of the notice and the date of the hearing at least two months’ rent arrears are outstanding. If that ground is made out, the Court must make a possession order. Under the Act, the mandatory ground for arrears will require at least three months’ rent to be outstanding both at the date of service of the Section 8 Notice and the date of the possession hearing. For the Build to Rent sector this will mean that stakeholders must bear a further period of arrears before being able to take action to seek possession of the property. Whilst this may not be significant for one property, over a whole portfolio, this is likely to be a substantial burden for build to rent landlords.
1
More Arrears Are Required Before An Order For Possession Can Be Sought
Under the current regime, one of the grounds enables a landlord to serve a Section 8 Notice if both at the date of service of the notice and the date of the hearing at least two months’ rent arrears are outstanding. If that ground is made out, the Court must make a possession order. Under the Act, the mandatory ground for arrears will require at least three months’ rent to be outstanding both at the date of service of the Section 8 Notice and the date of the possession hearing. For the Build to Rent sector this will mean that stakeholders must bear a further period of arrears before being able to take action to seek possession of the property. Whilst this may not be significant for one property, over a whole portfolio, this is likely to be a substantial burden for build to rent landlords.
Reliance On Statutory Process To Increase Rent
Currently, many landlords agree rent increases with their tenants when one fixed-term tenancy ends and upon negotiating a new fixed-term tenancy. However, under the new regime, landlords will need to serve a statutory notice to increase the rent (no more than once per year). The tenant can challenge the rent increase by application to the FTT (before the increased rent becomes payable). The FTT will then determine the rent under the statutory mechanism which is either the open-market rent if lower than the proposed rent or the proposed rent. Any rent increase then takes effect after the FTT decision. However, the Secretary of State has the power to make regulations to change the effective date of the rent increase. This provision was added to the Act to allay fears of there being no downside to tenants challenging any rent increase in order to delay the date when payment of the increased rent would be due (even in cases where the landlord was successful in increasing the rent). The other important point which will be relevant to popular Build to Rent locations is that a tenant can challenge the rent within the first 6 months of the tenancy or conversion to an assured tenancy by implementation of the Bill. This could be used to bring down rents if they are not reflective of the local open market which means the Build to Rent provider will lose the advantage of the block being desirable and the rents reflecting that as it will be the open market rent in the locality which is determinative.
2
2
Reliance On Statutory Process To Increase Rent
Currently, many landlords agree rent increases with their tenants when one fixed-term tenancy ends and upon negotiating a new fixed-term tenancy. However, under the new regime, landlords will need to serve a statutory notice to increase the rent (no more than once per year). The tenant can challenge the rent increase by application to the FTT (before the increased rent becomes payable). The FTT will then determine the rent under the statutory mechanism which is either the open-market rent if lower than the proposed rent or the proposed rent. Any rent increase then takes effect after the FTT decision. However, the Secretary of State has the power to make regulations to change the effective date of the rent increase. This provision was added to the Act to allay fears of there being no downside to tenants challenging any rent increase in order to delay the date when payment of the increased rent would be due (even in cases where the landlord was successful in increasing the rent). The other important point which will be relevant to popular Build to Rent locations is that a tenant can challenge the rent within the first 6 months of the tenancy or conversion to an assured tenancy by implementation of the Bill. This could be used to bring down rents if they are not reflective of the local open market which means the Build to Rent provider will lose the advantage of the block being desirable and the rents reflecting that as it will be the open market rent in the locality which is determinative.
3
Ban On Bidding For Rental Properties
In a significant change to the way in which properties are let. Landlords are not permitted under the Act to invite, encourage or accept an offer exceeding the proposed advertised rent for a property. To prepare for this change, landlords and agents of build to rent properties will want to retain evidence of property adverts and offers of proposed rent which they receive for properties which can be produced in response to a local authority’s request to demonstrate compliance with these provisions, once they come into force.
3
Ban On Bidding For Rental Properties
In a significant change to the way in which properties are let. Landlords are not permitted under the Act to invite, encourage or accept an offer exceeding the proposed advertised rent for a property. To prepare for this change, landlords and agents of build to rent properties will want to retain evidence of property adverts and offers of proposed rent which they receive for properties which can be produced in response to a local authority’s request to demonstrate compliance with these provisions, once they come into force.
Right For A Tenant To Request Consent For A Pet And
The Act contains provisions enabling a tenant to request consent to keep a pet at the property. A landlord cannot unreasonably withhold their consent to the tenant’s request. There is a process which must be followed, with 28 days for the landlord to respond either granting or refusing consent, from the date of the tenant’s request. When the Bill was originally drafted it contained provision for a landlord to require a tenant to take out a pet insurance product against damage if the landlord granted consent to a pet. However, this was removed from the Bill and the idea of a pet damage deposit was also rejected. A landlord will only be able to seek the statutory maximum deposit (in most cases of 5 week’s rent) in the usual way which would need to cover both any damage caused by the tenant and by a pet (for which consent was granted). Build to Rent operators will be cautious about being left with a shortfall where a request for a pet is made and granted and damage is caused which exceeds the amount of the tenant’s deposit which they hold.
4
4
Right For A Tenant To Request Consent For A Pet And
The Act contains provisions enabling a tenant to request consent to keep a pet at the property. A landlord cannot unreasonably withhold their consent to the tenant’s request. There is a process which must be followed, with 28 days for the landlord to respond either granting or refusing consent, from the date of the tenant’s request. When the Bill was originally drafted it contained provision for a landlord to require a tenant to take out a pet insurance product against damage if the landlord granted consent to a pet. However, this was removed from the Bill and the idea of a pet damage deposit was also rejected. A landlord will only be able to seek the statutory maximum deposit (in most cases of 5 week’s rent) in the usual way which would need to cover both any damage caused by the tenant and by a pet (for which consent was granted). Build to Rent operators will be cautious about being left with a shortfall where a request for a pet is made and granted and damage is caused which exceeds the amount of the tenant’s deposit which they hold.
5
Landlords Will Need To Have An Active Listing On A New Private Rented Sector Database
Much of the detail surrounding the private rented sector database will be contained in secondary legislation and this forms part of phase 2 of the implementation of the Act during late 2026. However, landlords will need an active listing to market or let properties and to obtain an order for possession. The secondary legislation will contain details of how entries are to be made, including the documents to be submitted, the requirements for an active listing on the database and any fees payable by the landlord. This will be an additional administrative and financial burden for landlords and their agents.
We are tracking developments on our Essential Residential Hub and our timeline: Evolution of the private rented sector.
5
Landlords Will Need To Have An Active Listing On A New Private Rented Sector Database
Much of the detail surrounding the private rented sector database will be contained in secondary legislation and this forms part of phase 2 of the implementation of the Act during late 2026. However, landlords will need an active listing to market or let properties and to obtain an order for possession. The secondary legislation will contain details of how entries are to be made, including the documents to be submitted, the requirements for an active listing on the database and any fees payable by the landlord. This will be an additional administrative and financial burden for landlords and their agents.
We are tracking developments on our Essential Residential Hub and our timeline: Evolution of the private rented sector.