1st September 2025 | Caroline Vernon | Residential Property, Property, Real Estate

The Renters’ Rights Bill has almost completed its passage through the House of Lords. Report stage in the House of Lords took place on 1 July 2025 with the Third Reading to follow on a date to be announced.

The key changes are as follows:

Abolish fixed term tenancies

The Bill will abolish fixed term Assured Shorthold Tenancies (“ASTs”) and so called “no-fault” evictions. Landlords will be prevented from serving Section 21 Notices giving at least 2 months’ notice to a tenant to vacate the premises. Instead, all tenants will become assured periodic tenants occupying the property on a month-by-month basis. A tenant will be able to give 2 months’ notice to a landlord if they want to leave the premises. Landlords, however, will need to prove a statutory ground in order to obtain possession. The Government has sought to strengthen those grounds of possession. The most commonly relied upon mandatory ground for possession is a specified amount of rent arrears, which, under the Bill will require a higher threshold of arrears to be established than under the current law. The new proposed ground 8 will require there to be at least 3 months’ rent arears both at the date of service of the Section 8 Notice and the date of the hearing. Under the current law, there must be at least 2 months’ rent arrears to rely on ground 8. This means that clients will need to factor in higher arrears before seeking possession.

Increasing rent

As the new style assured periodic tenancies will have no “end date”, landlords will need to rely on the statutory process for increasing rent. This requires landlords to serve a statutory notice of increase of rent giving at least 2 months’ notice of the increase. Tenants will be able to challenge rent increases in the First-Tier Tribunal (Property) Chamber (“FTT”). Once the Tribunal has determined the open market rent for the property, this will be payable from the later date of determination rather than the date of the notice of increase. Rental increases will be restricted to one per year. A notice of increase of rent can only be served after one year has elapsed since the date of determination by the Tribunal, or date when the last rent increase took effect. In addition, there is a general right to challenge the rent in the first 6 months of the tenancy. The new rent will be assessed on the basis of the open market rent for the property. The Government have confirmed during the passage of the Bill that it is opposed to the implementation of any rent controls under the legislation.

Requests to keep pets

There is a term implied into all assured tenancies, that a tenant has the right to request consent to keep a pet at the property and the landlord cannot unreasonably refuse consent. A landlord must respond to a request within 28 days and where consent is granted, the landlord can require the tenant to take out additional insurance as a result of having a pet in the property or reimburse the costs incurred by the landlord of doing so. Obtaining pet insurance will be permitted under the Tenant Fees Act 2019, by an amendment under the Bill. There may be wider restrictions in leasehold properties, under the head lease or new build developers of leasehold properties may limit pets to particular floors or buildings.

Property database

Underpinning the Bill is a new property database which will require landlords to have an active listing. Much of the detail about how the database will operate and what information will be required to achieve an active listing will be contained in secondary legislation, which is not currently available. Additional administrative costs should be factored into a clients’ business model in registering and updating their listings on the property database.

County Court capacity

There are no provisions in the Bill to deal with the potential increase in possession claims in the County Court or challenges to rent in the FTT. Landlords can currently use an accelerated possession procedure where a Judge will usually make a possession order without a Court hearing. As landlords will be required to prove a ground for possession, the majority of possession claims, once the Bill becomes law, will require at least one Court hearing. The Government have provided assurances that there is sufficient capacity in the court system to deal and the possession process will ultimately be digitised to ensure that this does not become longer than the current system.

Restrictions on rent in advance

The Government has restricted the ability for a landlord to request rent to be paid in advance. This is currently a useful option where a tenant does not meet affordability criteria or is in full time education. It provides a low-risk option for landlords to proceed with tenants who may not otherwise be in a position to enter into a tenancy. As a result, there is likely to be an increase in the use of guarantors to guarantee the obligations of a tenant under an assured periodic tenancy. However, guarantors liability is effectively “open ended” which means they could be on the hook for an unspecified period of time.

Transitional provisions

The Government will implement the Bill on a commencement date (to be announced). As from that date all existing ASTs will be converted to assured periodic tenancies. Where a Section 21 Notice has been served and possession proceedings sent to the Court immediately before the commencement date, the Section 21 Notice will remain valid until those possession proceedings are concluded. If a Section 21 Notice has been served before the commencement date but the landlord has not yet sent possession proceedings to the Court (whether or not because the Section 21 Notice has not yet expired), the landlord will not be able to start possession proceedings until either 6 months after the service of the Section 21 Notice or 3 months beginning with the commencement date, if the 3 month period ends before the 6 month period. So, the longstop date for possession proceedings would be 3 months from the commencement date. The Bill contains identical provisions for Section 8 Notices relying on a ground of possession served before the commencement date except that technically speaking a Section 8 Notice remains valid for 12 months from the date of service (not 6 months as for Section 21 Notices).

At Sherrards Solicitors, we provide expert legal guidance on the evolving reforms, ensuring property owners, investors, and developers are well-prepared for the future of property ownership.

To find out more, contact the Residential Real Estate team here or contact Caroline using the details below.

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