Labour’s new Renters’ Rights Act represents one of the most significant overhauls of landlord tenant regulations in decades. With the aim of improving housing standards and tenant protection, the impact on landlords, the wider housing market and rental profitability is considerable.
Royal Assent was granted in October 2025 and the Act is set to reshape how private renting operates, tightening compliance duties.
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In doing so, it will also create increased costs through landlord licensing and change the balance of power between landlords and tenants. Key components include a new property database and PRS Ombudsman, with the licensing fees impacting buy-to-let profitability. This has led to fears the reforms could drive some landlords to exit the market altogether.
Understanding the Renters’ Rights Act
The Act is Labour’s answer to long-standing calls for reform in the private rented sector. It introduces new tenancy laws to improve renters’ stability, raise property standards and ensure more accountability from landlords.
One of the headline changes is the abolition of Section 21 “no-fault” evictions enabling landlords to evict tenants without reason. Instead, all tenancies will move towards an open-ended periodic structure, where landlords can regain possession only under defined circumstances, such as rent arrears or the need to sell. This fundamentally changes how landlords manage their portfolios.
The Act also introduces a Decent Homes Standard to the private rented sector for the first time, aligning it with the social housing sector. Properties must be safe, well-maintained and free from serious health hazards. This includes ensuring any furniture supplied by landlords is fit for use and does not pose a safety risk – for instance, avoiding broken slats on beds, or items that don’t meet fire safety standards.
The new national property database
Another major feature is the creation of a national property database – a centralised, online registry for landlords and their properties within the private rented sector. Every landlord in England who lets out an assured or regulated tenancy will have to register both themselves and each of their properties on the database.
The new system aims to make compliance easier to monitor, giving tenants, councils and mortgage lenders access to verified information. For landlords, it means another layer of administration. Each property must be listed, verified and regularly updated. Failing to register could mean being unable to serve a valid possession notice, or civil penalties of up to £40,000 for repeated non-compliance.
Although the government has yet to publish a final implementation date, landlords should prepare now by ensuring their documentation is complete, safety checks are up to date, and records are easily accessible.
The PRS Ombudsman
The Private Rented Sector Ombudsman will be compulsory for all landlords in England, offering tenants a free, impartial route to resolve complaints without needing to go to court.
The Ombudsman will handle delays in repairs, breaches of tenancy terms, poor communication, or failure to meet legal obligations. Decisions will be binding on landlords and may include requirements to issue apologies, pay compensation, or carry out remedial work. For landlords, joining the scheme will be mandatory.
While many responsible landlords already handle complaints promptly and professionally, the Ombudsman introduces a new level of scrutiny. Record-keeping and communication with tenants must be robust, as even minor disputes could now escalate into formal investigations.
Rising landlord licensing costs
Many councils already operate selective or additional landlord licensing schemes. Now, under the new legislation, landlords could face three separate fees: the local authority’s selective licence fee, a registration fee for the national property database and an annual membership fee for the PRS Ombudsman.
Selective licensing fees vary widely between councils, from around £600 to more than £1,200 per property. These costs will now be joined by new national charges. The database and Ombudsman fees have not yet been confirmed, but estimates suggest they could add another £100–£150 per property annually. Administrative complexity is also increasing. Landlords will need to monitor renewals, manage different payment systems and ensure properties remain compliant under several overlapping schemes.
Will landlords leave the rental market?
The truth is that some landlords may indeed decide to sell. The combination of stricter regulations, rising interest rates, higher costs and growing administrative burdens has already seen a decline in small-scale buy-to-let investment.
Landlords with older housing stock that requires expensive upgrades to meet the Decent Homes Standard may find compliance financially unviable. Others may resent the loss of flexibility around evictions or the increase in bureaucracy and fees. If these landlords exit, the result could be a reduction in rental supply.
However, for professional landlords who run their portfolios like businesses, the reforms could ultimately be beneficial. A more regulated market tends to weed out non-compliant operators and create a level playing field, helping reputable landlords stand out. Compliance can become a selling point, attracting tenants willing to pay a fair rent for a well-managed home.
Regional differences across the UK
The Renters’ Rights Act applies primarily to England. In Wales, Scotland, and Northern Ireland, distinct tenancy frameworks already exist, and these remain in force.
In Wales, the Renting Homes (Wales) Act 2022 has replaced traditional tenancies with “occupation contracts”, granting tenants more security and requiring landlords to provide written statements of terms. The Welsh framework also strengthens eviction protection and ensures tenants can’t be unfairly removed if landlords fail in their duties, such as carrying out repairs.
In Scotland, the Private Housing Tenancies (Scotland) Act 2016 introduced open-ended private residential tenancies that offer long-term security and restrict rent increases. Scotland has already moved towards the same tenant-centric model that England is now adopting.
In Northern Ireland, the Private Tenancies Act (Northern Ireland) 2022 regulates rent increases, caps deposits at one month’s rent and requires landlords to provide essential tenancy information. It also creates new offences and penalties for non-compliance.
While the Renters’ Rights Act is a game-changer for England, landlords elsewhere in the UK are already working within comparable frameworks.
The wider implications of Labour’s reforms
Labour’s approach reflects a clear intent to professionalise the private rented sector. The combination of the national property database, the PRS Ombudsman and enhanced property standards represents a shift from a lightly regulated system to one where accountability and transparency are central. For landlords, this means moving towards a more businesslike, compliant model that requires planning, record-keeping and investment.
Reviewing your compliance status, budgeting for new fees and familiarising yourself with registration processes will save stress later. Those who adapt quickly, operate transparently and provide quality housing will likely thrive in this new landscape.