The Renters’ Rights Act received Royal Assent just last week, marking the most significant shake-up of the UK’s private rental sector in almost 40 years. For asset owners and institutional investors managing BTR, PBSA, and other multi-tenant residential portfolios, this legislation brings both challenges and opportunities that will fundamentally reshape operational strategies.
With implementation expected in early to mid-2026, now is the time to understand what’s changing, and what it means for your assets.
The Key Changes
The End of Fixed-Term Tenancies
The Act abolishes Section 21 ‘no-fault’ evictions and replaces all assured shorthold tenancies (ASTs) with periodic tenancies that continue indefinitely unless validly terminated. Tenants can now give two months’ notice to leave at any time, fundamentally altering the predictability that institutional investors have relied upon for occupancy forecasting.
For BTR operators, this means saying goodbye to the security of knowing how long a tenant will remain in a property. This may lead to some investor uncertainty as to forecasting occupancy levels and may lead to greater churn.
Reformed Possession Grounds
Landlords must now use Section 8 notices, citing specific grounds for possession.
Landlords will need to give four weeks’ written notice, and tenants must have arrears of at least three months before a landlord can bring a tenancy to an end. In effect, expect tenants to potentially accrue at least four months’ arrears before action can be taken, a significant cash flow consideration for portfolio planning.
Rent Review Restrictions: The Real Concern
Perhaps the most concerning change for institutional investors is the new rent increase framework. Landlords can only propose one annual rent increase using a Section 13 notice, with any increase required to be at market rate.
Here’s where it gets complicated: if a tenant believes the proposed rent increase exceeds market rate, they can challenge it at a tribunal, who will determine what the market rent should be. The applicable rent will always be the lower of the landlord’s proposed rent and the market rent as determined by the Tribunal.
There is a growing feeling that this could lead to serious problems for the sector, especially if tenants realise they have nothing to lose by challenging increases, the tribunal system could get swamped by a backlog of cases and, if it finds in favour of the tenant, the difference in rent due will be backdated to the original appeal.
John Coddington, head of residential property and asset management at JLL, said of this: “The biggest concern landlords have is not the right to challenge. It’s that if a challenge is made, it goes to the First Tier Tribunal and we’re not confident they’re resourced well enough to deal with that promptly.”
Pet-Friendly Properties
Tenants cannot keep pets without landlord consent, but landlords cannot unreasonably refuse consent and have 28 days to give their decision after the request is made. For BTR portfolios built to high specifications, this introduces new considerations around potential property damage and insurance requirements.
New Private Rented Sector Database
A property cannot be marketed for rent unless the landlord and property are both entered on the database, and this will include BTR landlords and properties. This represents an additional administrative burden that operators must factor into their compliance frameworks.
Awaab’s Law and the Decent Homes Standard
One of the most significant additions to the Renters’ Rights Act is the extension of Awaab’s Law and the Decent Homes Standard to the private rented sector for the first time.
Awaab’s Law, which applies strict timeframes for repairing dangerous hazards like damp and mould, will be extended to privately rented homes. Currently in force for social housing from October 2025, the government has confirmed it will use new powers in the Renters’ Rights Bill to extend Awaab’s Law to the private sector.
The law is named after two-year-old Awaab Ishak, who tragically died in 2020 due to prolonged exposure to damp and mould in his social housing home. Under the regulations, landlords must fix emergency health and safety hazards within 24 hours of reporting, and must investigate significant damp and mould within 10 working days of being notified, then make properties safe in five working days.
For BTR and PBSA operators, this means implementing robust monitoring systems to identify and address environmental hazards before they escalate. The timeline for private sector implementation is still being consulted on, but operators should prepare now for faster repair duties and rigorous record-keeping requirements.
What About PBSA?
The situation for student accommodation is notably complex. On-campus university accommodation or off-campus purpose-built student accommodation provided by an accredited provider falls outside the scope of the Act within the so-called “student exemption”. Accredited landlords can continue to offer fixed-term tenancies aligned with the academic calendar.
However, if accommodation is PBSA but not operated by an accredited provider, the Act applies. This creates a two-tier system where students renting BTR flats from non-accredited providers will have the same legal standing as non-student tenants.
The Silver Lining for Institutional Investors
Despite the challenges, there are reasons for cautious optimism within the BTR sector specifically. BTR providers will be able to navigate the new regime much better than individual landlords, given the structure and scale of BTR operators.
Why? They benefit from professional, sophisticated in-house resource, which is well equipped to onboard new tenants, respond to complaints and manage any court processes; their target demographic are generally more affluent and less likely to fall into rental arrears; and most BTR developments are high quality and still relatively new, so they can more easily meet the standards required.
BTR operators already adhere to high professional standards, offering well-managed, high-quality rental accommodation with a focus on long-term occupancy. In a market that’s increasingly professionalised, this is a competitive advantage.
With potentially 5% of the PRS market lost due to combined pressures on individual landlords, demand for BTR assets is likely to increase.
The Operational Challenges Ahead
Yet proceed with caution. BTR operators will still need to ensure that their management systems are geared up to administer the formal annual rent increase notices, which under the new legislation will be the only way of increasing the rent during a tenancy.
This procedure, known as a “Section 13 notice”, has already been used in the affordable housing sector for many years and is notoriously tricky to get right, an invalid notice may mean that the rent increase is delayed for months, leading to significant loss of income for the BTR investor if the errors are systemic.
Additionally, BTR operators will need to be keep an eye out for a higher turnover of tenants, as the new ability for tenants to end their tenancies on two months’ notice could lead to some occupiers using a BTR home as a short let.
So where does data come in?
In this new regulatory landscape, one thing becomes crystal clear: data is your competitive advantage.
The challenges introduced by the Renters’ Rights Act, unpredictable tenancy lengths, potential rent disputes, increased compliance requirements, and now strict timeframes for addressing environmental hazards like damp, mould, and legionella, all point to a fundamental need for real-time, granular operational insights.
Here’s how this connects:
Environmental risk management becomes non-negotiable. With Awaab’s Law extending to the private sector and landlords facing strict 24-hour emergency repair deadlines and 10-day investigation timeframes for damp and mould, reactive approaches are no longer viable. Utopi’s new environmental monitoring features provide a single source of truth for risk management:
- Real-time monitoring for damp and mould – Utopi Multisensors detect humidity levels, temperature variations, and environmental conditions that create the perfect breeding ground for mould before it becomes visible. Early warnings mean you can address issues proactively, staying ahead of the 10-day investigation requirement.
- Real-time monitoring for legionella risk management – While landlords have always had legal obligations under COSHH to assess legionella risks, enforcement is tightening. Utopi monitors water temperature across your portfolio, alerting you when conditions fall into the dangerous range where legionella thrives, and tracking water flow to identify stagnant systems.
- Early warnings, automated compliance support, and actionable insights – Instead of waiting for tenant complaints, you receive proactive alerts when environmental conditions deviate from safe parameters. This creates an auditable trail of monitoring and intervention that demonstrates your duty of care, critical if you ever need to prove compliance to regulators or in court.
Beyond environmental risk management, data protects against the volatility the new bill may bring:
- Understanding occupancy patterns in real-time helps you anticipate churn before it happens, allowing for proactive engagement and improved retention strategies.
- Energy efficiency becomes even more critical when tenant turnover increases and cash flow uncertainty rises…
- Tenant engagement transforms from nice-to-have to essential. Engaged tenants are retained tenants, and in a world where they can leave with just two months’ notice, retention is everything.
- Compliance and reporting become streamlined. The new Private Rented Sector database and heightened regulatory scrutiny mean documentation and performance tracking are non-negotiable.
The Renters’ Rights Act is here. The operators who thrive will be those who use data not just to react to change, but to get ahead of it.