The Renters Rights Act - Its Impact on Commercial Investments
The Renters' Rights Act:
What It Will Mean for Your Freehold Investment
The most significant shake-up of England's rental sector in a generation comes into force on 1 May 2026. Here is what commercial property investors need to know before it does.
The Renters' Rights Act 2025 received Royal Assent in October 2025 and comes into force on 1 May 2026. It will fundamentally change the relationship between landlords and tenants across England. For owners of mixed-use freeholds — with residential above commercial — the implications are significant and the time to prepare is now.
No more Section 21 'no-fault' evictions
Landlords will no longer be able to remove tenants without a valid legal reason. All evictions will need to proceed via Section 8 grounds, requiring court orders in most cases.
Fixed-term tenancies will end
All new residential tenancies will become rolling periodic agreements. Tenants will be able to end them with 2 months' notice. Landlords will no longer be able to set a fixed end date.
Contractual rent reviews will be banned
Any rent review clause in an existing tenancy agreement will become void. Landlords will only be able to increase rent once per year via the statutory Section 13 process, with 2 months' notice.
Tenants will be able to challenge rent increases
Tenants will be able to apply to the First-tier Tribunal to contest any increase — at no cost to themselves. The new rent will only take effect after the Tribunal rules.
Longer notice required to regain possession
Landlords wishing to sell or move into their property will need to give 4 months' notice, and will not be able to use these grounds within the first 12 months of a tenancy.
Pets cannot be unreasonably refused
Landlords will need to consider all pet requests fairly. Any refusal must be made in writing with a reason given, and tenants will have the right to challenge an unreasonable decision in court.
No discrimination against benefit tenants
Landlords will no longer be able to refuse to rent to prospective tenants solely because they are in receipt of housing benefit or other welfare payments.
Rent in advance capped at one month
Landlords will not be able to request more than one month's rent in advance. Those who currently use advance payments as part of their tenant assessment process will need to find alternative approaches.
Restrictions on rent bidding
Landlords and letting agents will be required to publish an asking rent for every property. Prospective tenants may offer up to the advertised amount, but cannot be encouraged to bid above it, and no offer over the asking rent can be accepted.
EPC rating C required by 2030
All privately rented homes will need to meet a minimum energy efficiency standard by 2030. Residential units within mixed-use freeholds will be included in this requirement.
Notice required to sell or move in
Minimum before possession grounds apply
Max fine for missing info sheet deadline
EPC rating C deadline for rented homes
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1
Prepare the government Information Sheet ahead of the 31 May 2026 deadline. Once the Act comes into force, landlords must issue the official PDF — available to download from gov.uk — to every named tenant. It can be sent by email or delivered in person. Failure to comply risks a fine of up to £7,000. -
2
Review your tenancy agreements now. Any contractual rent review clauses will become void from 1 May. Check what mechanism you have in place and ensure all future increases will follow the Section 13 process with the correct notice and paperwork. -
3
Assess your EPC ratings before 2030 costs catch up with you. Residential units in mixed-use freeholds that do not meet EPC rating C will require investment. Factoring this in now — particularly if you are considering a sale — could make a meaningful difference to your net position. -
4
Revisit your exit strategy. The extended notice periods and reformed possession grounds will mean that achieving vacant possession takes considerably longer than it does today. If you are considering selling within the next 2–3 years, early planning will be important. -
5
Consider the impact on your asset valuation. The removal of Section 21, restrictions on advance rent and bidding, and the risk of tribunal challenges to rent increases may affect how investors price mixed-use stock going forward. We are happy to discuss what this could mean for your specific property.
If you own a freehold investment with a residential element and would like to discuss how these changes may affect your asset — or explore your options confidentially before the Act comes into force — we would welcome a conversation.