The Renters' Rights Act 2025: What Buy-to-Let Mortgage Advisers Need to Know

The Renters' Rights Act 2025 came into force on 1 May 2026. For landlords in England, it is the most significant change to the legal framework governing private tenancies in a generation. For mortgage advisers with buy-to-let clients, it changes the context of every BTL conversation — from how you discuss affordability to what you tell clients about their ability to manage their properties.

This is not a housing law guide. The Act's full implications for letting agents, solicitors, and landlords themselves are covered extensively elsewhere. What this piece focuses on is the specific intersection between the Act and buy-to-let mortgage advice: what lenders have done in response, what advisers should be telling clients, and where the risk areas are.

What changed on 1 May 2026

The core changes from the Renters' Rights Act are the following.

Section 21 notices — the so-called "no fault" eviction mechanism — have been abolished entirely. Landlords can no longer serve a Section 21 to recover possession without giving a reason. All evictions now require the landlord to demonstrate one of the new statutory grounds for possession, which cover categories including arrears, breach of tenancy, the landlord wishing to sell, or the landlord or a family member wanting to move in.

All existing assured shorthold tenancies automatically became assured periodic tenancies on 1 May 2026. No new ASTs can be granted. The assured periodic tenancy model means the tenancy continues until either the landlord or tenant ends it — there is no fixed term with a built-in end date. Landlords who were used to relying on the expiry of a fixed term to recover possession, without needing a formal reason, no longer have that option.

Rent increases are now subject to a statutory process: landlords can only increase rent once per year, must serve a valid Section 13 notice, and must give two months' notice of any increase. Tenants can challenge proposed increases at the First-tier Tribunal if they believe the rent is above market rate.

There are also new rules restricting landlords from discriminating against prospective tenants with children or those in receipt of benefits — terms in mortgage or superior agreements that previously restricted lettings to these groups are now of no effect and cannot be relied on.

Why this matters for buy-to-let mortgages

Buy-to-let mortgage products have historically been structured around the AST model. Fixed terms, defined tenancy end dates, and the existence of a Section 21 backstop were all embedded in how lenders assessed risk and how borrowers managed their portfolios. The shift to assured periodic tenancies changes several things.

Deeds of variation. Some lenders previously required deeds of variation to insert protective clauses into tenancy agreements — particularly to prevent a long tenancy from being treated as an AST under the Housing Act, which created risk around lenders' mortgage possession rights. With ASTs abolished, that specific concern falls away. Lenders should no longer need deeds of variation purely to manage AST-related risk, which simplifies some of the documentation requirements for certain BTL cases.

Lender mortgage terms. Most BTL lenders have already updated their standard mortgage terms to reflect the post-1 May 2026 framework. Advisers should verify, for any new application, that the lender's current terms are consistent with the assured periodic tenancy model. Older mortgage offers or offers made before May 2026 may contain references to ASTs that are now technically obsolete — worth flagging with clients who received offers before the Act came into force and are completing now.

Possession risk assessment. The BTL stress-testing process typically assumes a landlord can recover possession within a reasonable period if needed. Under Section 21, that was a relatively straightforward legal process. Under the new grounds-based system, possession timescales are potentially longer and more uncertain, particularly where the borrower needs to demonstrate one of the new statutory grounds to a court. Some lenders have factored this into their underwriting criteria; others have not yet made explicit changes. Advisers should check, for lenders they work with regularly, whether the possession risk assumptions in the underwriting criteria have been updated.

What to tell landlord clients

The figure that stands out from Paragon's Q4 2025 landlord survey is that around 25% of landlords were still unaware of the Renters' Rights Act at that point — and the proportion was higher among smaller portfolio landlords and those who self-manage. By 1 May 2026, that uncertainty will have been partially resolved by circumstance, but the detail of the changes is still not uniformly understood.

From an adviser perspective, ensuring clients understand the new framework is both a service point and a Consumer Duty obligation. A landlord who does not know that Section 21 has gone, or who does not understand the new possession grounds, may make decisions — including mortgage decisions — based on an understanding of their legal position that is no longer accurate.

The key points to cover with landlord clients are the following.

Section 21 is gone and will not return. Clients who relied on the Section 21 backstop to manage tenancy risk, or who structured their portfolio around regular AST renewals, need to adjust their approach. The new grounds for possession are the only route, and they require preparation and, in many cases, court proceedings.

The information sheet obligation was real and carried penalties. Landlords and letting agents were required to give tenants the government's Renters' Rights Act information sheet by 31 May 2026. Failure to do so carried a potential fine of up to £7,000. For clients who are self-managing, checking this was completed is a useful service touch.

Rent review processes have changed. Clients who are not working with a letting agent need to understand the Section 13 process. Unilateral rent increases outside the statutory process can be challenged, and landlords who have not updated their approach may find increases do not take effect.

Portfolio landlords with multiple tenancy types should review their agreements. If a client has a mix of properties — some let before May 2026, some after — their legal obligations may not be uniform across the portfolio. An adviser conversation can identify this as an issue and prompt them to take legal advice.

The limited company angle

The Renters' Rights Act has accelerated conversations about whether landlord clients should hold property in a limited company structure rather than personally. This question was already relevant because of the Section 24 mortgage interest relief restriction, which removed the ability for individual landlords to deduct mortgage interest from rental income at the higher rate. Adding the changed tenancy framework has reinforced the argument for some clients that a corporate structure offers advantages — in both tax treatment and risk management.

For mortgage advisers, the limited company BTL conversation is relevant at the product level. Limited company BTL products are a distinct market. Not all lenders offer them; rates differ from personal BTL products; the underwriting criteria vary; and in some cases the personal guarantee requirements mean the distinction between personal and corporate liability is less clear than clients sometimes expect.

Before a client moves properties into a limited company, they need specialist tax advice. The mortgage cost of restructuring can be significant — selling to the company involves SDLT, potential capital gains, and new mortgage arrangements, all of which need to be factored into whether the change makes sense financially. Your role is to advise on the mortgage elements and ensure clients understand that the rest of the decision needs professional input from a tax adviser or accountant. See adverse credit mortgage cases: how advisers can handle complex applications for more detail on the product considerations.

Portfolio landlords and the stress-test implications

For clients with multiple properties, the Renters' Rights Act changes add another layer to an already complex case type. Portfolio landlords (those with four or more mortgaged properties) are already subject to the PRA's underwriting standards for portfolio landlords, which require lenders to assess the whole portfolio rather than individual properties in isolation.

The changed tenancy framework — particularly the removal of Section 21 and the adjustment to possession timescales — may affect how some lenders assess portfolio-level risk. Advisers placing portfolio cases should be prepared for more detailed lender scrutiny around how clients manage tenancy transitions, how they handle void periods, and whether their rental income projections are realistic in a model where tenancies are open-ended by default.

In practical terms, this probably strengthens the argument for clients to hold accurate records of tenancy agreements, rental income history, and property management practices. A portfolio that is professionally managed and well-documented is easier to underwrite. A self-managed portfolio with ad hoc tenancy arrangements and informal rental reviews is more likely to generate questions. See FCA compliance and your CRM: what UK mortgage advisers need to know for a detailed breakdown of what lenders are currently looking for on these cases.

What Consumer Duty means in this context

Advisers with landlord clients have a Consumer Duty obligation to ensure those clients understand the product they are taking out and the context in which they will be using it. In the BTL space, post-Act, that context has changed significantly.

A landlord buying a first BTL property today is entering the market without Section 21, without fixed-term ASTs, with a different possession framework, and with a changed rent review process. A mortgage advice conversation that does not address those realities is not giving the client a full picture of what they are getting into.

This does not mean the adviser needs to provide legal advice. It means being clear that the regulatory environment for private renting has changed, explaining the headline implications, and encouraging the client to take specialist landlord legal advice as well as mortgage advice before proceeding. That referral is good practice and good Consumer Duty evidence.

The BTL market outlook

The Renters' Rights Act has prompted some landlords to exit the market, particularly smaller landlords who relied heavily on Section 21 to manage their risk. UK Finance data through 2025 and early 2026 shows a continuing net reduction in the number of BTL mortgage accounts, with higher redemption rates than new originations in many quarters. Remortgage activity remains relatively strong as existing landlords manage their rates, but first-time BTL lending volumes are subdued.

For advisers, the practical consequence is that the BTL clients who remain in the market tend to be more experienced, more deliberate, and more demanding as a client group. They are buying in a more complex environment, and they know it. Advisers who can engage with that complexity — covering the regulatory landscape, the product options, the portfolio structure questions, and the Consumer Duty context — are more likely to retain and grow this client base than those who treat the BTL conversation as a straightforward rate and LTV exercise.

The Act is now in force. It is not reversible in any near-term political scenario, and even an election would not bring back Section 21. The BTL landlords who remain are adapting. The advisers who will serve them best are the ones who have already done the same.

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The Renters' Rights Act 2025 is available in full at legislation.gov.uk/ukpga/2025/26/contents. The government's landlord information sheet is available at gov.uk. This post covers England only — Scotland and Wales have separate tenancy frameworks.