Renters’ Rights Bill: What It Means for Buy to Let Landlords
If you own or plan to invest in buy to let property, you may be wondering what the Renters’ Rights Bill means for you.
The new legislation aims to give renters stronger protection and create a fairer, safer rental market. But while it seeks to improve standards for tenants, it also introduces significant changes for landlords and investors.
From the abolition of fixed-term tenancies to stricter compliance requirements, the Renters’ Rights Bill will redefine how rental property is managed, financed, and maintained. Understanding these changes early gives you time to prepare, adapt your strategy, and protect your investment.
What is the Renters’ Rights Bill?
The Renters’ Rights Bill is a major reform of the private rented sector. It is designed to improve living conditions, enhance tenant security, and increase accountability among landlords.
Key goals include:
- Ending no-fault evictions
- Making all tenancies rolling rather than fixed-term
- Introducing a national landlord database
- Extending the Decent Homes Standard to private rentals
- Creating a new ombudsman to resolve disputes
These measures are intended to strengthen tenants’ rights while raising standards across the rental market. However, they also bring a new layer of regulation that landlords and investors must understand.
Ending fixed-term tenancies
One of the most significant changes under the Bill is the end of Assured Shorthold Tenancies (ASTs). All tenancies will automatically become periodic, meaning they will continue on a month-by-month basis.
This reform gives tenants more flexibility. They can now leave a property with just two months’ notice. However, it also removes the security that fixed-term contracts previously gave landlords.
For buy to let investors, this means:
- Potentially higher tenant turnover and longer void periods
- Less predictability around rental income
- The need for better tenant communication and proactive property management
If you rely on steady rental income to meet your mortgage repayments, it’s important to plan for these changes.
The abolition of Section 21
Section 21, often known as the “no-fault eviction” rule, is being abolished. Landlords will only be able to regain possession using specific Section 8 grounds, such as selling the property, moving in themselves, or dealing with serious rent arrears.
While this change offers greater security to tenants, it also makes the eviction process more complex and time-consuming. Notice periods are being extended, and landlords must provide valid evidence for any possession claim.
For investors, this adds a new layer of legal risk and potential delays in recovering possession. It also means you should review your property strategy, particularly if you may wish to sell or repurpose your property in the future.
Rent increases and income stability
The Bill introduces new restrictions on rent increases. Landlords can only raise rents once per year, and any rise must reflect the current market rate. Tenants will also be able to challenge rent hikes through a tribunal if they feel the increase is unfair.
At the same time, rental bidding wars will be banned, meaning you can no longer accept offers above the advertised rent.
This greater transparency benefits tenants but limits the flexibility landlords previously had to adjust rents in response to demand. If your buy to let mortgage relies on a certain rental yield, you’ll need to make sure your figures still stack up.
Mortgage advisers at Kerr & Watson can help you reassess your affordability and yield projections, ensuring your investment remains sustainable under the new rules.
New compliance responsibilities for landlords
The Renters’ Rights Bill will introduce new legal obligations for landlords. These include:
- Registering yourself and your properties on a digital landlord database
- Joining a new ombudsman scheme for dispute resolution
- Meeting the Decent Homes Standard
- Complying with anti-discrimination laws, ensuring all tenants are treated fairly
Local authorities will gain stronger powers to enforce these requirements. Penalties for non-compliance could reach up to £40,000 for repeated breaches.
While most professional landlords already meet high standards, the administrative burden will increase. Staying organised with documentation, repairs, and communication will be essential.
If you’re considering expanding your portfolio, these compliance factors may influence which properties you buy and how you manage them.
How will the Bill affect buy to let mortgages?
The shift to rolling tenancies and the loss of Section 21 may influence how lenders view risk in the buy to let sector. With less certainty over rental income and longer eviction timelines, some lenders may tighten their criteria for buy to let mortgages.
Possible impacts include:
- Higher rent coverage ratios (lenders may require rental income to be a larger percentage of monthly repayments)
- Lower maximum loan-to-value ratios
- Stricter affordability checks
- Potentially higher interest rates for landlords with smaller reserves
While this might sound concerning, it doesn’t mean buy to let lending will disappear. It’s more about lenders being cautious during a period of adjustment.
Market confidence and investor outlook
Some landlords may decide to leave the market, especially those with smaller portfolios or limited financial flexibility. However, others see this as an opportunity.
With fewer landlords in the market, rental demand could outstrip supply, supporting stable or even rising rents in many areas. Investors who stay informed, compliant, and financially prepared may find strong long-term potential.
To stay competitive, focus on:
- Maintaining well-presented, compliant properties
- Building positive tenant relationships
- Managing finances prudently to handle income gaps
- Reviewing your insurance and protection cover regularly
The changes
To prepare for the bill, you can start by:
- Reviewing existing tenancy agreements and identifying which will convert to rolling contracts
- Checking your rent levels and ensuring they align with market rates
- Ensuring all compliance documents (EPC, gas safety, electrical checks) are up to date
- Planning for potential cash flow fluctuations
- Seeking advice on remortgaging or restructuring your portfolio if needed
Conclusion
The Renters’ Rights Bill represents one of the most significant shifts in the rental market in a generation.
For buy to let investors, it brings both challenges and opportunities. While new rules will tighten regulation and reduce flexibility, they also promise a more professional, stable rental sector over the long term.
By understanding the reforms early, preparing your finances, and seeking expert guidance, you can position yourself to succeed in this new environment.
If you are a buy to let investor and would like advice regarding mortgages, contact Kerr & Watson today.
