The highly anticipated Renters Rights Act (also known as the Renters Reform Bill) has passed Royal Ascent this week, meaning it will now progress timelines to become law, with the current estimate Spring 2026.
Part of the UK government’s ‘plans for change’, the Renters Rights Act is said to ‘rebalance’ the gap between tenants and landlords. The largest change to the lettings sector in a generation, the Renters Rights Act is a strategic shift towards professionalism in the UK rental market. There are still several unknowns regarding the details of the changes, which are expected to be unveiled in more detail in the coming months.
Here’s what we know so far.
What is the Renters Rights Act?
- The Act is a newly passed legislation designed to change the UK rental market, by increasing stability and security.
- Landlords can expect changes around several elements, such as around pet ownership. In managed residences, such as in Affinity Living, landlords will remain unaffected by these changes, as the building already operates a pet-friendly policy already.
Instead of viewing the new act as a concern, savvy investors are recognising the act as a means to accelerate professionalism of the UK rental market, in turn creating a more stable environment that can generate greater long-term profit.
Read on to discover 4 benefits for UK property investors following the Renters Rights Act.
1. Improved stability for property investors
The new Renters Rights Act abolishes the previously used ‘Section 21’, and moves to a simpler tenancy structure, that provides more consistency in income and greater business security.
- Assured Shorthold Tenancies will come to an end, with the tenancy becoming a periodic tenancy, meaning that it is an ‘open ended agreement’. This essentially means tenants who wish to remain can do so easily, with those wishing to leave requiring to give two months notice.
- Rather than having to continually make a decision of whether to move or stay every 12 months, they will fall into the ‘habit’ of remaining in the property longer. This will likely reduce void periods.
- As void periods are one of the largest contributors to a reduction in net yield, this opens the opportunity for an investor to receive greater returns, thanks to the consistent tenancy agreement.
- Less tenant turnover also saves the investor on marketing costs to fill the property, in addition to cleaning costs.
- The new tenancy method will likely offer more predictable, uninterrupted rental income for investors.
2. Property investment that is future-proofed
With the new act ‘raising the bar’ on property standards, high-quality properties are set to greater solidify their position at the top of the rental market.
- High quality properties will rise to the forefront of the rental market, with lower-quality properties likely to exit the market. This will reduce supply, and increase rental demand.
- Properties with good EPC ratings and compliance records will become even more desirable to other investors, should you decide to sell.
- Two examples of premium, high quality residences positioned in in-demand cities are Vita Living Circle Square in Manchester, and Edition Birmingham. Both of these developments are some of the highest calibre in their respective cities, offering excellent rental opportunities and strong capital growth.
3. Clarity on investors property rights
The new Renters Rights Act outlines clear routes to recovering your property, and in turn your property investment rights. This is a welcome addition to enhance investors’ legal grounds for possession.
- The new legislation presents defined routes for the investor, when the tenants are in breach of contract or the UK property investor’s circumstances change.
- There is now a clearer route to recover your property, whether that be to sell or to move in yourself.
- There is also greater clarity surrounding timelines and reasoning, making the experience more positive for both tenants and landlords.
4. Professional management rewarded
Risks associated with poor administration will be reduced, as through the new rules strong property organisation is required, which ensures the property’s security as an investment. Investors committed to providing high-quality homes will be rewarded under the new legislation.
- The New Renters Rights Act requires thorough record-keeping, and a strong track record of communications.
- Professional property management is therefore encouraged, to increase the security of the investment in the future.
- Property management companies can manage all aspects of property letting for you, from tenant enquiries to upkeep and maintenance. Our in-house company, Select Residential offers a seamless service for investors, providing a hands-off investment journey.
UK property investment
UK property investment continues to remain a popular choice for global investors holding capital. The consistent stream of rental income, in addition to the potential capital growth attracts investors to the UK property market from across the world.
At Select Property, our experienced team is based across key global territories, including Manchester, Dubai, Shanghai, Hong Kong and Saudi Arabia to support our investor community. Contact us if you would like to learn about any of our current investment opportunities.
**Disclaimer: This information is for general knowledge and guidance only and does not constitute financial advice.**