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If 2025 is remembered for anything in the private rented sector, it will be as the yearlong-promised reforms stopped being speculative and became unavoidable. The Renters’ Rights Bill finally received Royal Assent on 27 October 2025 after years of debate, delay and anticipation. But the real shift is phased. New investigatory powers for local authorities began on 27 December 2025, while the main tenancy changes are expected to follow from 1 May this year. Either way, the direction of travel is clear and the full impact will become clearer as we move through the year.
At the heart of this shift is the Renters’ Rights Act, set to reshape the relationship between landlords and tenants more dramatically than anything I have seen in the decades I have worked in this sector. The intention of improving tenant security is not in dispute. As with any industry that grows, it must also evolve to support those it serves. The concern I hear repeatedly from landlords and professionals is whether the practical implementation is properly resourced. Reform of this scale needs strong foundations and, in too many areas, those foundations still feel weak.
The passing of the Act marked the culmination of a long and often uncertain legislative journey. The abolition of Section 21 no-fault evictions, the move to periodic tenancies and expanded enforcement powers represent a fundamental change in how the sector operates. For responsible landlords, the issue has never been about opposing reform. It is about whether the system is ready to support it, fairly and consistently, for both sides.
We have known for years that the courts were under pressure and that possession cases were taking far too long to resolve. At the same time, the private rented sector was relied upon to house millions of people. Yet meaningful investment in court capacity and modernisation did not happen ahead of these reforms. That omission is now coming home to roost. As landlords move away from Section 21, they will be forced to rely almost entirely on Section 8 routes, which are slower, more complex and heavily dependent on an already overstretched court system. If landlords are expected to play by a new set of rules, they need a system that works when things go wrong.
Alongside legislative change, landlords in 2025 have faced continued financial pressure. The November Budget added to the strain at a time when mortgage costs, compliance requirements and maintenance expenses were already sky-high. Form any smaller landlords, the sums no longer stack up in the way they once did. The outcome is predictable: portfolios shrink, sales increase and supply tightens in a market where demand is already high.
It is also worth saying that not everything is moving in one direction. Borrowing costs have started to ease. The Bank of England cut Bank Rate to 3.75% on 18 December, and some City economists expect further reductions this year, potentially taking base rate closer to 3.25%. That will help some landlords as they refinance, but it won’t be a reset button. Many will still be rolling off older fixed rates and costs remain high compared with the assumptions that underpinned buy-to-let for years. Confidence, clarity and workable systems still matter just as much as the price of money.
This helps explain why we saw an uplift in landlords seeking possession ahead of the Section 21 ban. At Landlord Action, our possession instructions were up 62% in September 2025 compared with September 2024. Many were acting not out of bad faith but out of uncertainty. They are worried about rising arrears, limited possession routes and the risk of being tied into long tenancies without confidence that the system will work when problems arise. For some, the decision had already been made to sell up entirely.
Another major development in 2025 was the expansion of enforcement powers. Under the new Act, local authorities will be able to issue civil penalties, with a tiered approach, up to £7,000 for some breaches and up to £40,000 for serious or repeat offences. It is right that rogue landlords are tackled. The concern among responsible landlords is that the enforcement net may be cast too widely if guidance is unclear or enforcement varies from one area to the next. Minor administrative errors should not be treated like serious malpractice.
All of this has fed into falling confidence across the sector. When landlords feel that risk continues to rise while support and clarity do not keep pace, it inevitably affects supply. Every landlord who exits takes a rental property with them, and in a market where demand already far exceeds supply, that can only push rents higher.
As we look at the year ahead, the focus has to shift from headline announcements to implementation. The key provisions of the Renters' Rights Act are coming into force starting in May, and the way this transition is managed will determine whether the reforms succeed or cause further damage to the sector.
The biggest risk remains the courts. Without genuine investment in capacity training and modernisation, delays will worsen and confidence will fall further. Bringing in sweeping changes without first fixing the system landlords must rely on was always going to be problematic and 2026 will test that decision.
There is also a need for clarity. Many landlords and agents still need to get to grips with the guidance and how elements of the new regime will work in practice. Uncertainty creates risk and risk drives landlords away, but landlords who wish to remain also have a responsibility to educate themselves on the changes now.
Enforcement must also be proportionate and consistent. Local authorities need proper funding, training and oversight to ensure new powers are used fairly. A postcode lottery approach will only undermine trust and accelerate landlord exit.
Despite all of the challenges, there is still an opportunity to get this right. With proper support and realistic implementation, responsible landlords can adapt and continue to provide much-needed homes while running sustainable businesses. However, in my view, that requires government to recognise that the private rented sector depends on confidence, investment and workable systems…and most of all, landlords!
2025 was a turning point. The choices made in 2026 will determine whether the private rented sector stabilises or continues to shrink. If supply keeps falling, rents will keep rising and the pressure on tenants will only intensify. Fixing the courts, supporting responsible landlords and delivering reform properly is now essential. The future of the sector depends on it.
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