The private rented sector is moving into a period of profound legislative and financial change, with multiple changes converging to create a narrowing strategic window. The Renters’ Rights Act 2025 (the Act), which received Royal Assent in late October 2025, will not fully take effect until 1 May 2026 — but when it does, the fundamentals of residential property investment in England will shift decisively.

Overlay this with the Autumn Budget’s introduction of an additional two percentage points of income tax on property income from April 2027, alongside new property specific tax bands, and advisers are seeing a marked increase in landlords taking stock of their portfolios, questioning long term viability, and accelerating exit plans, particularly for units held personally and acquired when mortgage interest was deductible.

What is clear is that landlords who intend to sell, restructure, or simply maintain full flexibility over their assets must understand the implications of the Act and ensure all preparatory actions are taken before the key deadline of 1 May 2026. After that point, obtaining vacant possession will in many cases become slower, more complex and reliant on judicial discretion. For landlords with time sensitive plans, inaction now could have multi year consequences.

The three phase reform programme
Although implemented in phases, Phase 1 – effective 1 May 2026 – is the most significant. It abolishes Section 21 no fault eviction notices, revises Section 8 grounds for possession, converts all Assured Shorthold Tenancies (ASTs) into Periodic Assured Tenancies (PATs), limits rent increases, and introduces new rights for tenants to request pets alongside strengthening anti-discrimination protections.

Later phases will introduce the PRS database, the Landlord Ombudsman and extend Decent Homes and Awaab’s Law and are important for compliance planning and operational management. But for the purposes of possession strategy, it is Phase 1 that matters.