The Renters' Rights Act 2025 is the biggest change to private renting in England in more than thirty years. Its main tenancy reforms took effect on 1 May 2026, and they change how deals should be assessed — especially rent-to-rent deals, where the operator is the landlord to the people living in the property.
This guide explains what has changed, how it affects each strategy, and what to ask a sourcer before you commit. It covers England only; Wales and Scotland have their own rules.
This article is general information, not legal advice. Rules and guidance are still being updated, so check GOV.UK and take advice from a housing solicitor before relying on any of it.
The main changes in brief
- Section 21 "no-fault" evictions have been abolished. Landlords can only end a tenancy using a ground in section 8 of the Housing Act 1988, such as rent arrears, antisocial behaviour, or wanting to sell or move in.
- Fixed terms are gone. Assured shorthold tenancies have been replaced by periodic assured tenancies that roll on until the tenant leaves or the landlord uses a valid ground. Tenants can leave with two months' notice.
- New grounds to sell or move in generally can't be used in the first 12 months of a tenancy and need four months' notice.
- Rent can only be increased once a year, using the statutory section 13 process with two months' notice. Tenants can challenge increases at the First-tier Tribunal.
- Rental bidding is banned, and landlords can't ask for more than one month's rent in advance once a tenancy is agreed.
- Tenants can ask to keep a pet, and landlords can't unreasonably refuse.
- Blanket bans on tenants with children or on benefits are unlawful.
- Later phases bring a private rented sector landlord database, a landlord ombudsman and a Decent Homes Standard for private rentals.
Councils have stronger enforcement powers, including fines and wider use of rent repayment orders, so getting compliance wrong is more expensive than before.
What it means for rent-to-rent deals
In a typical rent-to-rent deal, an operator (often a limited company) rents a property from the owner and then lets rooms or the whole property to occupiers. There are two relationships to think about.
The agreement with the owner
Where the operator is a company, the agreement with the owner is usually not an assured tenancy at all, because assured tenancies can only be granted to individuals who live in the property. That means the new periodic tenancy rules generally don't apply to the head agreement, and its terms come from the contract — so how the agreement is drafted matters more than ever.
The occupiers
The people living in the property are usually assured tenants of the operator, so the full Renters' Rights Act rules apply between them. In practice the operator:
- Can't use section 21 to get a property back from occupiers
- Can't offer fixed terms to line up with the head agreement
- Must use the section 13 process for rent increases
- Must meet all the landlord obligations, including licensing, safety and, in time, database registration
The exit problem
The biggest risk is the end of the deal. If the head agreement ends while occupiers are still in place, the operator may not have a ground to remove them, and lawful subtenants can in some cases become direct tenants of the owner. Owners are increasingly aware of this, and good rent-to-rent agreements now spell out what happens at the end.
Before agreeing a rent-to-rent deal, ask the sourcer:
- Is the head agreement a company let, and has it been reviewed since the Act came in?
- What happens to the occupiers if the agreement ends early or isn't renewed?
- Has the owner given written consent to subletting, and does their mortgage and insurance allow it?
- Who holds any HMO or selective licence, and is the operator a "fit and proper person"?
- Do the figures allow for slower rent increases and the cost of compliance?
What it means for rent-to-serviced-accommodation deals
Genuine holiday and short-stay lets are not assured tenancies, so the Act's tenancy rules don't apply to guests. But check two things:
- Long stays. If a "guest" stays for months and the property becomes their only or main home, they could be treated as an assured tenant. Contractor stays need clear terms.
- The head agreement. The owner's consent, mortgage and insurance must allow short-term letting, and local planning rules may limit it — in Greater London, whole homes can only be short-let for 90 nights a year without planning permission.
What it means for buy-to-let and HMO purchases
For investors buying with tenants in place, or buying to let, the Act changes the risk rather than the opportunity:
- Buying with sitting tenants: you inherit a periodic tenancy. Check the rent, payment history and whether a section 13 increase has been served in the last 12 months.
- Planning a refurbishment or sale: you can't simply serve notice and gain vacant possession. Factor in the notice periods and the restrictions on the new grounds.
- Arrears: the mandatory arrears ground now needs a higher level of arrears and a longer notice period, so allow for that in your cash flow.
- Rent growth: one increase a year, at market level, that tenants can challenge. Be wary of deal packs that assume quick rent rises.
How to check a deal pack after the Act
- Has the sourcer updated their figures and assumptions since 1 May 2026?
- Do voids, legal costs and compliance costs reflect the new rules?
- Are any tenancies described as "fixed term" or relying on section 21? That's a red flag.
- Is the exit plan realistic without section 21?
Use our rent-to-rent deals page and rent-to-rent guide to compare opportunities, and take legal advice on any agreement before you sign it.