The property investment landscape has been facing increasing challenges in recent years, and the proposed Renters (Reform) Bill — currently progressing through Parliament — could represent a significant turning point for private landlords.
With low capital growth, higher interest rates, increased affordability requirements, rising acquisition costs, higher taxation of rental income, and elevated maintenance standards, private landlords are already grappling with squeezed margins and increasing compliance burdens.
The Renters (Reform) Bill introduces a raft of new obligations which, if implemented, could significantly deter private investment in residential property.
Key Proposals in the Renters (Reform) Bill
Mandatory Registration Requirements
Landlords will be required to register each rental property with a new Private Rented Sector Database, paying an annual fee for each property. In addition, landlords must also join the Private Rented Sector Ombudsman, again paying a per-property fee.
Abolition of Fixed-Term Tenancies
All tenancies will become open-ended. Tenants will be able to leave at any time on two months' notice, increasing the risks of void periods and associated liabilities, such as council tax and utility bills during vacancy.
Rent Control Measures
- Rents will be capped and subject to new advertising and transparency requirements, including publication of a maximum asking rent.
- Rent increases will be limited to once per year via a statutory Section 13 Notice, with a minimum two months’ notice.
- Tenants will have the right to challenge proposed increases at the Tribunal without exposure to backdated adjustments.
- Rent review clauses in tenancy agreements will be prohibited.
Restriction on Grounds for Possession
Landlords will only be permitted to recover possession for specified grounds. Section 21 ‘no fault’ evictions will be abolished.
Where seeking possession for rent arrears, landlords must prove arrears of at least three months both at the time of issuing proceedings and at the court hearing. Notably, if the landlord is in breach of any legislative obligation (even if minor), they may lose the right to possession altogether.
Compliance with the Decent Homes Standard
The Decent Homes Standard will be extended to the private rented sector, together with the provisions of Awaab’s Law mandating stricter timelines for repairs.
Equal Treatment Requirements
Landlords must not discriminate against tenants based on benefit status, family composition (including presence of children), or pet ownership.
Financial Penalties and Tenant Rights Expansion
- The Rent Repayment Orders regime will see penalties doubled. Company directors and superior landlords may also be held personally liable.
- Ombudsman services will be free to tenants but funded by landlords, with the Ombudsman empowered to impose significant penalties against landlords.
- Landlords will have no reciprocal right to bring complaints against tenants.
Application to Existing Tenancies
The new rules will apply not only to new tenancies but also retrospectively to all existing fixed-term and periodic agreements, converting them automatically to the new periodic model.
Restrictions on Rent in Advance
Landlords will be restricted to taking a maximum of one month's rent in advance.
Parliamentary Commentary
Recent House of Commons debates have emphasised the government’s intention to 'rebalance the rental market in favour of tenants' (Hansard, 24 April 2025).
The Minister for Housing stated:
“The Renters (Reform) Bill is not about punishing good landlords but about ensuring that tenants across England have security and quality housing as a basic right.”
However, critics have warned that the proposals may inadvertently drive responsible landlords out of the market. Sir Robert Syms MP (Conservative, Poole) observed:
“We are risking the collapse of the private rented sector if we overburden it with regulation without recognising the essential role landlords play.”
Similarly, Anthony Mangnall MP (Conservative, Totnes) highlighted:
“There is an urgent need to strike a balance. If we create a system that landlords find too hostile, we will see a reduction in available rental homes, pushing up rents.”
Conclusion
The proposed changes represent a fundamental shift in the private rented sector landscape. Private landlords will face not only greater compliance costs and risks but also reduced control over their investments.
In our view, the Renters (Reform) Bill, if enacted in its current form, may indeed be the final deterrent for many private investors, prompting a significant retraction of private rental housing stock.
Landlords are advised to take early professional advice to understand the potential impact on their portfolios and to consider strategic options before the legislation comes into force.
For tailored advice, please contact our Residential Property Team at Ashley Wilson Solicitors LLP.
Ashley Wilson Solicitors LLP
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