Being a Landlord isn't easy

Tenancy reform: enacted changes, but commencement remains important

The Renters' Rights Act 2025 is the most significant reform of the English private rented sector for many years. However, landlords must distinguish between Royal Assent and the date on which individual provisions take effect. Implementation is phased.

The Act will abolish section 21 "no-fault" possession notices in England. Once the relevant provisions are in force, landlords will no longer be able to recover possession through the current section 21 procedure. Instead, possession will depend on specified statutory grounds.

The reforms will also replace most assured shorthold tenancies with periodic tenancies. Landlords will retain possession grounds, including those relating to serious rent arrears, tenancy breaches, the sale of the property, and occupation by the landlord or a close family member. These grounds will be subject to detailed conditions, notice periods and evidential requirements.

Other measures include:

• restrictions on rental bidding;
• limits on rent increases, generally through the statutory section 13 process;
• stronger rights for tenants to request permission to keep a pet;
• a new private rented sector ombudsman;
• a national private rented sector database; and
• further protection against discrimination involving families with children and people receiving benefits.

Not all provisions take effect at once. Landlords should therefore check the commencement position before serving notices, issuing new tenancy agreements or changing rent. Until section 21 is abolished, it can generally still be used only where the detailed legal requirements have been met, including deposit protection, service of prescribed documents and compliance with relevant licensing rules.

Safety obligations remain a day-to-day priority

Safety compliance is not optional. Failures can lead to civil penalties, enforcement action and, in some circumstances, difficulties recovering possession.

In England, the Smoke and Carbon Monoxide Alarm (England) Regulations 2015, as amended in 2022, require landlords to ensure that:

• at least one smoke alarm is installed on every storey used as living accommodation;
• a carbon monoxide alarm is installed in every room containing a fixed combustion appliance, excluding gas cookers; and
• alarms are repaired or replaced once the landlord is informed that they are faulty.

Landlords must also arrange an annual gas-safety inspection where gas appliances are provided, supply tenants with the relevant record, and maintain electrical installations. The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 generally require fixed electrical installations to be inspected and tested at least every five years by a qualified person.

Additional duties can arise in houses in multiple occupation (HMOs), converted buildings and higher-risk residential blocks. Fire-safety responsibilities, for example, may extend beyond an individual flat where the landlord is responsible for common parts or the building.

Energy efficiency: EPC E remains the current minimum

Under the Minimum Energy Efficiency Standards (MEES), most privately rented properties in England and Wales must have an Energy Performance Certificate (EPC) rating of E or above, unless a valid exemption has been registered.

The rules apply to new lettings and continuing tenancies. A landlord with a property below EPC E should not assume that improvements can be deferred simply because the tenant has remained in occupation.

The previous proposal to raise the minimum standard for many rental properties to EPC C was withdrawn and is not currently law. However, energy efficiency remains a significant policy issue. Landlords planning refurbishment, acquisition or remortgaging may still wish to consider the long-term cost of improving poorly rated homes.

Tax: higher acquisition costs and continued pressure on individual landlords

Tax remains central to investment decisions.

For purchases of additional residential properties in England and Northern Ireland, the higher rates of Stamp Duty Land Tax (SDLT) apply. Since 31 October 2024, the higher-rate surcharge has been 5%, rather than 3%. A separate 2% surcharge may apply to non-UK resident purchasers of residential property. From 1 April 2025, the standard SDLT nil-rate threshold for residential purchases returned to £125,000.

The position should be checked before exchange, particularly where a transaction involves a company, trust, mixed-use property or replacement main residence.

Individual landlords continue to face restrictions on relief for residential mortgage interest. Rather than deducting all finance costs from rental income, most receive a basic-rate tax reduction. This can produce a higher taxable profit than the landlord’s cash position suggests, especially for higher- and additional-rate taxpayers. Companies are taxed differently and can generally deduct finance costs when calculating profits, although incorporation brings separate tax and commercial considerations.

The furnished holiday lettings tax regime was abolished from April 2025. Former qualifying holiday-let businesses are now generally taxed under the rules applying to other property income.

Budgeting for compliance, not simply rent and repairs

Compliance costs now extend well beyond routine maintenance. A realistic landlord budget may need to include:

• EPC improvement works and evidence supporting any exemption;
• gas, electrical and fire-safety checks;
• deposit protection and prescribed information;
• professional inventories, referencing and property-management costs;
• legal costs for possession action; and
• tax, accounting and reporting support.

Landlords in England must also carry out right to rent checks, where applicable, before granting a tenancy. This requirement does not apply in Scotland, Wales or Northern Ireland. .

Different rules elsewhere in the UK

The legal framework is not uniform across the UK. Wales operates under the Renting Homes (Wales) Act 2016 and has its own landlord registration and licensing system, Rent Smart Wales. Scotland uses private residential tenancies and has distinct eviction, rent and letting-agent rules. Northern Ireland has separate tenancy, deposit-protection and registration requirements.

Accordingly, a process that is compliant for an English property should not be assumed to work elsewhere in the UK.