The Renters' Rights Act in 2026: What It Actually Costs Landlords

The Renters' Rights Act is no longer a consultation, a bill, or something to plan for. Its first phase came into force on 1 May 2026, and the rules below are the ones governing every private tenancy in England today.

Most coverage of the Act frames it as a tenant-protection story, which it is. This article asks a narrower question: what does it cost a landlord, in pounds and in optionality? Some of the answers are smaller than the noise suggests. One of them — the confirmed EPC C deadline — is considerably larger, and lands hardest on precisely the stock that produces the best yields.

What changed on 1 May 2026

Change	Detail	Status
Section 21 abolished	No-fault evictions ended; possession requires a specific legal ground	In force 1 May 2026
Fixed terms banned	All assured tenancies are now assured periodic (rolling) tenancies	In force 1 May 2026
Rent increases	Once per year, Section 13 notice only, 2 months' notice, tribunal-challengeable	In force 1 May 2026
Rent in advance	Maximum 1 month, and only after the agreement is signed	In force 1 May 2026
Rental bidding	Banned — you must advertise a price and cannot accept above it	In force 1 May 2026
Discrimination	Cannot refuse tenants because they have children or claim benefits	In force 1 May 2026
Pets	Cannot unreasonably refuse; must consider each request and give valid reasons	In force 1 May 2026
Information Sheet	Must have been given to every tenant by 31 May 2026	Deadline passed
Landlord Ombudsman	Free independent complaints service tenants can use	Phase 2, from late 2026
PRS Database	Central register of all landlords and rented properties	Phase 2, from late 2026

Sources: GOV.UK — Renters' Rights Act: an overview for landlords, Housing Hub — Renting is changing, GOV.UK — The Renters' Rights Act Information Sheet 2026.

If you let property in England and haven't yet issued the Information Sheet, that is the first thing to fix — the deadline was 31 May 2026 and the penalty is up to £7,000.

The penalty ladder

The Act's enforcement model is civil penalties issued by local councils, not court action as a first resort. There are two rungs:

Breach	Penalty
First or minor non-compliance	Up to £7,000
Serious or repeat non-compliance	Up to £40,000
Serious and repeat (alternative route)	Criminal prosecution, unlimited fine

Source: GOV.UK — Guide to the Renters' Rights Act.

The number that matters here isn't £7,000 or £40,000 in isolation — it's the penalty against the annual rent roll of a single property. A £7,000 penalty on a property grossing £950 a month is 7.4 months of gross rent, and roughly a year and a half of net rent on a typical leveraged buy-to-let. A £40,000 penalty is a capital event on most single-property portfolios. Compliance is not a paperwork chore in this regime; it is the single highest-variance line in the P&L.

Possession: what's actually left

Section 21 is gone. What remains is a set of specific grounds, each with its own conditions:

• Selling the property or moving in (yourself or a close family member). Cannot be used in the first 12 months of a tenancy. Notice period is four months in many cases.
• Rent arrears. The court must grant a possession order where the tenant owes three months' rent. That is a higher bar than the two months that previously triggered the mandatory ground.
• Antisocial behaviour or property damage. Notice periods are shorter, and for antisocial behaviour you can apply to court immediately.
• Student HMO re-letting. Narrow — applies to full-time students in HMOs on joint contracts, not purpose-built student accommodation.

Tenants can leave at any point on two months' notice.

Source: GOV.UK — Renters' Rights Act: an overview for landlords.

What this costs in practice

The real cost of losing Section 21 isn't the eviction itself — most tenancies end because the tenant leaves. It's the loss of a fast, certain exit, which has three knock-on effects a landlord should price in:

1. Vacant possession is slower to arrange. Selling with a tenant in situ means either selling to another landlord (a thinner buyer pool, usually at a discount) or serving a Ground 1A notice and waiting four months — after the 12-month protected period has run. If you plan to sell within two years, the tenancy you sign today shapes your exit.
2. Arrears are absorbed for longer. Three months of arrears before the mandatory ground bites, plus notice, plus court time. On a £950/month tenancy, three months of arrears alone is £2,850 you are unlikely to recover in full.
3. Tenant selection carries more weight, with fewer tools. You can no longer screen using large advance payments (capped at one month), and you cannot refuse tenants for having children or claiming benefits. Referencing and a properly protected deposit now do the work that flexibility used to do.

None of these are catastrophic individually. Together they argue for longer holds, better referencing, and pricing voids realistically rather than optimistically.

Rent increases: the Section 13 process

This is the change most likely to bite quietly, because it converts an administrative act into a contestable one.

• Rent can rise once per year, no more.
• The only mechanism is a Section 13 notice giving at least two months' notice of the new rent.
• The increase must reflect open-market rent — what you'd achieve reletting today.
• The tenant may apply to the First-tier Tribunal, which determines the market rent.

Source: GOV.UK — Renting out your property: Rent increases.

The practical effect: an above-market increase is now a negative-expected-value move. Previously, an ambitious increase either worked or prompted the tenant to leave. Now it can be referred to a tribunal that sets the market rent — so the ceiling is the market either way, and the attempt costs you goodwill and possibly a tribunal appearance. The rational strategy under this regime is to track market rent accurately and increase to it annually, rather than under-increase for years and then attempt a large correction that a tribunal will simply reset.

Knowing the actual market rent for your specific property, rather than a portal's asking-price average, is now the load-bearing input in that decision. A free Offrly rental valuation gives you a defensible figure to put in the Section 13 notice.

The EPC C deadline: confirmed, and regressive

This is the big one, and it's now settled policy rather than speculation. In its response to the 2025 consultation, the government confirmed:

Item	Confirmed position
Standard	EPC C or equivalent
Deadline	1 October 2030
Scope	All tenancies (not new tenancies first)
Cost cap	£10,000 per property
Estimated average spend	£5,400 (impact assessment)
Cost-cap exemption	Register if still short after £10,000 — valid 10 years
Low-value adjustment	Cap drops to 10% of property value for homes under £100,000
Metric	New EPC metrics: fabric performance (primary) + smart readiness or heating system (secondary)
Grandfathering	Homes rated C on the current Energy Efficiency Rating before 1 October 2029 stay compliant until that EPC expires
Regulations	Statutory instrument expected to be laid in 2027
Maximum fine	£30,000 per property per breach

Source: GOV.UK — Improving the energy performance of privately rented homes: government response.

Two details deserve more attention than they've had.

First, the metric is changing. Compliance is assessed against new EPC metrics — a fabric performance primary metric plus a secondary metric — not the Energy Efficiency Rating most landlords know. A property sitting comfortably at C today is not automatically compliant in 2030. The grandfathering clause (EER C before 1 October 2029 holds until that certificate expires) is a transition, not an exemption.

Second, the £10,000 cap is regressive. A cap expressed in pounds is a flat cost against wildly different asset values. Using HM Land Registry Price Paid data for the 12 months to March 2026 — 635,379 arm's-length residential sales — here is what the cap is worth against a median flat in each city:

City	Median flat (HMLR, Apr 2025 – Mar 2026)	£5,400 average spend	£10,000 cap
Stoke-on-Trent	£89,225	6.1%	11.2%
Bradford	£90,000	6.0%	11.1%
Hull	£92,000	5.9%	10.9%
Newcastle upon Tyne	£136,000	4.0%	7.4%
Nottingham	£137,750	3.9%	7.3%
Sheffield	£140,000	3.9%	7.1%
Birmingham	£141,000	3.8%	7.1%
Liverpool	£145,000	3.7%	6.9%
Leeds	£150,000	3.6%	6.7%
Manchester	£185,000	2.9%	5.4%
Bristol	£238,000	2.3%	4.2%
London	£480,000	1.1%	2.1%

Source: HM Land Registry Price Paid Data, arm's-length flat sales (category A), 12 months to 31 March 2026, analysed by Offrly. Medians shown where the city had 100 or more qualifying flat sales.

The pattern is unambiguous. The maximum capital call is five times heavier, as a share of asset value, on a Stoke flat than a London flat. And it lands on exactly the stock that our buy-to-let yields analysis identifies as the highest-yielding in the country: northern flats bought cheap against regional rents. The yield premium in Newcastle, Liverpool and Sheffield is partly compensation for older, less efficient housing stock — and the EPC C deadline is the bill for that arriving on a fixed schedule.

The Property Value Adjustment exemption (cap drops to 10% of value below £100,000) softens the very bottom of the market, and median flats in Stoke, Bradford and Hull fall inside it. But it's a thin band: only 3.6% of all arm's-length sales in the 12 months to March 2026 were under £100,000 (23,055 of 635,379). For the large majority of low-value rental stock — terraced houses in Hull at a £125,000 median, Stoke at £127,250, Bradford at £132,500 — the full £10,000 cap applies, at 7.5% to 8.0% of the asset's value.

Four years is enough time to plan this properly and not enough to ignore it. The two moves that follow: get a current assessment of where each property actually sits, and phase the work across tax years rather than meeting a 2030 wall with a portfolio-wide bill.

What this all does to net yield

Putting the pieces together for a typical leveraged personal buy-to-let, the Act and the EPC deadline hit different lines:

• Rent increases — neutral to slightly negative. The market is still the ceiling; you just can't overshoot it, and you must do it deliberately once a year.
• Voids and arrears — modestly negative. Longer arrears runway, slower vacant possession.
• Compliance risk — high variance. £7,000 to £40,000 for getting it wrong, against a few hours of admin to get it right.
• EPC capital spend — materially negative, front-loaded, and regressive by region. Budget £5,400 as a central case and £10,000 as the cap, against a 2030 deadline.
• Tenant pool — slightly positive, and under-discussed. Banning discrimination against benefit claimants and families widens the pool of applicants for exactly the family-sized terraced stock that dominates regional buy-to-let.

On our rental yield calculator, a Liverpool flat at the £145,000 HMLR median grossing £850/month yields 7.0% gross. Amortise the £5,400 central-case EPC spend over the four years to the deadline and it costs roughly 0.9 percentage points of gross yield a year over that window — meaningful, but not disqualifying, and it stops once the work is done. The £40,000 penalty for serious non-compliance, by contrast, is nine years of that property's gross rent.

The regime rewards landlords who treat this as a business with a compliance function, and punishes the ones treating it as a passive holding.

What didn't change

• Section 24 mortgage-interest relief restriction is untouched. Personal landlords still get relief capped at the basic rate.
• The 5% SDLT surcharge on additional properties (England and NI, from 31 October 2024) is untouched — see our stamp duty guide.
• Deposit protection rules still apply, and the deposit cap is unchanged.
• Limited-company ownership remains outside Section 24, and the Act applies to company landlords the same as individuals.
• Social housing providers are exempt from the tenancy-reform provisions until 2027.

The honest bottom line

The Renters' Rights Act is not the end of buy-to-let. It is the end of buy-to-let as a passive asset class. The costs it imposes on a compliant, well-run, adequately-priced tenancy are small. The costs it imposes on sloppy paperwork, above-market rent chancing, and stock that hasn't been maintained are large and, in the EPC case, unavoidable and dated.

If you're deciding whether to hold, improve or exit, the input that matters most is what the property is actually worth today and what it would actually rent for today — not what you paid, and not what the portal average says.

Get a free Offrly valuation → · Free rental valuation → · Rental yield calculator →

Sources

• GOV.UK — Renters' Rights Act: an overview for landlords — possession grounds, the 12-month protected period, notice periods, the three-month arrears threshold.
• GOV.UK — Guide to the Renters' Rights Act — Section 13 rent process, tribunal challenge, rent in advance, pets, and the £7,000 / £40,000 civil penalty ladder.
• GOV.UK — The Renters' Rights Act Information Sheet 2026 — the 31 May 2026 issuing deadline and the £7,000 penalty for failing to serve it.
• GOV.UK — Renting out your property: Rent increases — the Section 13 notice mechanics and First-tier Tribunal route.
• Housing Hub — Renting is changing — the 1 May 2026 commencement, periodic tenancies, bidding ban, advance-rent limit and discrimination provisions.
• GOV.UK — Improving the energy performance of privately rented homes: government response — confirmed EPC C by 1 October 2030, £10,000 cap, £5,400 estimated average spend, exemption durations, new metrics, and the £30,000 maximum fine.
• GOV.UK — Renters' Rights Act 2025 (legislation) — the Act as passed.
• HM Land Registry Price Paid Data — arm's-length residential sales (category A), 12 months to 31 March 2026, analysed by Offrly for the median-flat and cap-as-share-of-value figures. Contains HM Land Registry data © Crown copyright and database right. This data is licensed under the Open Government Licence v3.0.

Disclaimer: This article describes the Renters' Rights Act and the private-rented-sector energy efficiency regulations as they stood in July 2026, from the linked primary sources. It is not legal advice. Possession, rent-increase and penalty matters are fact-specific and should be taken to a solicitor or your local authority's private-sector housing team. The EPC C regulations had not yet been laid before Parliament at the time of writing — the government response states the intention to lay them in 2027, and details may change in the final statutory instrument. Offrly valuations are indicative market guidance, not regulated valuations or financial advice — use a RICS-qualified surveyor for mortgage, insurance or probate purposes.

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