How to avoid a costly Renters’ Rights Act trap

Rental reform has been looming on the horizon for years – but now we finally have some clarity. The Renters’ Rights Bill was given Royal Assent last month and officially became the Renters’ Rights Act 2025.  

Much of it will come into force from 1 May next year, so landlords need to be prepared for the biggest shake-up in the English private rented sector since the 1980s. And if you are one of the one in three landlords thinking of selling, there’s a catch you need to look out for. 

So what will the new law mean? One of the key changes is the end of assured shorthold tenancies (ASTs). From May, existing ASTs will automatically convert to periodic tenancies, which will renew each month until ended by the tenant or landlord. Other new rules include a limit to rent increases to once per year; measures to stop discrimination against tenants; an end to bidding wars on rental costs; and limiting the amount of rent to be paid up front to one month. 

Further into the future, from the end of next year the Act will introduce a PRS Database, with registration eventually becoming mandatory. By 2028, an official ombudsman scheme will also be introduced, and again landlords will be obliged to sign up. 

But the change that has caused most concern for many landlords is the end of Section 21 evictions. Until now, you could use these to serve notice on tenants without giving a reason. The Renters’ Rights Act tears up Section 21 and instead requires you to give specific grounds for eviction. 

Currently, you can serve a Section 21 notice and secure possession in as little as two months, after which you choose what you do with the property – sell it, for example. 

However, from 1 May, you will need to use Section 8 to give notice, which requires a specific reason. If you want to regain possession in order to sell a property, the Act adds a new ground, known as Ground 1A, to Section 8. You cannot require the tenant to give up possession in the first 12 months of the tenancy, and this also comes with a minimum notice period of four months – double what was required under Section 21. 

This will add an extra two months to your timescale if you want to sell a vacant property. But there’s another catch. To address concerns that landlords might use Ground 1A to evict tenants when they had no intention of selling, the Act lays out a 12-month “restricted period” during which you cannot re-let the property.  

This means that if you decide to sell and regain possession but then find you can’t sell – or simply change your mind – you will be stuck with a property that you cannot rent out for a whole year. With average UK rents now £1,344 per month, that could add up to £16,128 in lost income. 

There is an obvious solution – and that is to sell with tenants in place. That’s where Landlord Property Exchange comes in. Our unique platform matches sellers with motivated, vetted buyers who are looking for ready-made investments – often with tenants already in place. I’m delighted that the NRLA named us as its official sales partner earlier this year, recognising that our approach benefits everyone involve: 

• SELLERS avoid the delays and disruption of evicting tenants, renovating and so on. Their property is marketed discreetly to serious investors, and meanwhile they continue receiving rent right up to the point of exchange.  

• BUYERS save time finding tenants, and get a known yield on their investment from day one. With LP Exchange membership they get exclusive access to deals they won’t find anywhere else. 

• TENANTS get to stay in their home, with their tenancy moving seamlessly to the new owner. The property stays in the rental sector, which the NRLA warns is seeing a serious supply shortage. 

Meanwhile, our team handles the sale process efficiently and discreetly – from a single unit to a whole portfolio. If you’re thinking of selling a rental property, or you’re looking for new investment opportunities, book a chat with one of our advisors today.