The UK Government’s Renters’ Rights Act 2025 has now passed into law, marking one of the most significant overhauls of the private rented sector in recent decades.Designed to strengthen protections for tenants, the legislation also raises fresh questions for landlords about the future of the long-term profitability of investment in property.
End of no-fault evictions
At the heart of the Act is the abolition of so-called ‘no-fault’ evictions under Section 21 of the Housing Act 1988.
Landlords will no longer be able to regain possession of their properties at the end of a tenancy without providing a specific reason.
Instead, they will need to rely on a list of defined grounds such as rent arrears, breaches of tenancy, or a decision to sell or move into the property themselves.
The Government has argued that these changes will make renting more secure and predictable for tenants.
Secretary of State Steve Reed commented: “Our historic Act marks the biggest leap forward in renters’ rights in a generation. We are finally ending the injustice overseen by previous governments that has left millions living in fear of losing their homes.
“For decades, the scales have been tipped against tenants. Now, we’re levelling the playing field between renters and landlords.
“We are tearing down the walls of injustice in the private rented sector and building a future where tenants are protected, respected and empowered.
“This is an historic moment for renters across the country and we’re proud to deliver it.”
However, industry groups have warned that the shift may discourage new investment, particularly from smaller landlords who value flexibility.
Shift to rolling tenancies
Another key change is the introduction of rolling, or periodic, tenancies as the new standard.
This means tenancies will no longer end automatically after a fixed term, giving tenants greater stability but potentially limiting landlords’ ability to plan around renewals or rent reviews.
The Government hopes this approach will reduce the number of forced moves and make it easier for tenants to settle long-term in their homes.
For landlords, it introduces more uncertainty about when properties might become available for re-letting and could affect cash flow and maintenance planning.
Landlord reaction
The wider impact of the Act on the rental market remains to be seen. Some industry sources expect it to improve conditions, stabilise tenancies and moderate rent increases, while others believe it could lead to a contraction in supply if landlords choose to exit the market.
There is already evidence that some private investors are reassessing their property portfolios, particularly those who have seen their costs rise due to higher interest rates, energy efficiency requirements and tighter tax treatment of rental income.
For landlords, the passing of the Renters’ Rights Act signals a possible turning point in the economics of property investment, although the long-term implications won’t be understood for some time.
The traditional model of flexible short-term lets with regular turnover is likely to give way to a more regulated, tenant-centred market.
The reforms do not necessarily mean rental property will cease to be a viable investment, but it does suggest a need for a more careful approach.
Landlords who have relied on property as their primary route to long-term wealth may want to review how these changes fit within their broader financial plans.
As the new rules take effect, seeking professional financial advice could help landlords assess whether property remains the right vehicle for their future goals, or whether diversification into other forms of investment would offer greater stability in an evolving market.