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Renters’ Rights Act 2025 – What it means for local authorities.

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The Renters’ Rights Act 2025 goes beyond the abolition of assured shortholds and section 21 no-fault evictions. It also introduces a raft of measures intended to re-balance the legal relationship between residential landlords and their tenants at a time of housing crisis. 

Standing behind these reforms are the districts and unitaries which will have the difficult job of policing the new legislation. 

Indeed, the reason why new investigatory powers were brought into effect on 27th December 2025 was to give those councils a four-month head start to get their enforcement policies in place before the grand launch of the new legislation on 1st May 2026. Other key structural changes introduced by the 2025 Act, include:

  • The abolition of fixed term residential tenancies, which means that tenants can vacate on giving as little as 2 months prior written notice to the landlord;
  • Increased regulation of tenancy documentation;
  • An obligation on landlords and letting agents to quote a fixed rent when marketing a proposed residential letting and not being allowed to accept anything more than the quoted rent;
  • Increased restrictions on the amount of money which landlord can ask by way of advance rent;
  • A 12 months moratorium on re-letting, in circumstances where a landlord relies on one of the new non-fault grounds to recover possession in circumstances where they intend to sell the property or occupy for their own purposes.
  • A prohibition on discriminating against prospective tenants who either have children or are on benefits. Whilst this does not prevent a landlord from carrying out a financial assessment on a prospective tenant, state benefits must not be treated less favourably than other private income.
  • It is also made illegal for a landlord to ‘bluff’ a tenant into vacating by pretending to rely on a ground for possession which they cannot substantiate

Just to complicate things further, the 1st May 2026 launch will not apply to all residential lettings. Only those in the private rented sector. Social lettings will for the time being continue to be governed by the existing regime until the reforms are extended to social landlords later in 2026. It means that for the time being there will be two separate tenancy regimes running side by side.

The cost of getting it wrong

For private landlords and letting agents who get it wrong, there will be no second chances. There will be no warning letters. Only financial penalties. Nor is the new enforcement regime intended to be complaints-led.

Government guidance asks local authorities to be proactive in the enforcement of the new tenancy legislation and make full use of the investigatory powers and financial penalties which are made available to them. Local authorities will be incentivised to do this by being able to keep and recycle financial penalties into more enforcement.

Within the legislation there are at least three separate financial penalty regimes and a maximum range of penalties from £4,000 up to £40,000 depending on the nature and seriousness of the breach. The government also encourages councils to use financial penalties in preference to prosecution where it is possible to do so. Some circumstances giving rise to financial penalties require proof on a balance of probabilities whilst the most serious require proof beyond reasonable doubt. In each case, the process is the same.

The council will investigate and issue notice to the landlord or letting agent proposing a penalty of a certain amount and giving an opportunity for representations to be made. On the expiration of the period for representations, the council will serve notice of its decision. The landlord will then have a right of appeal to a first-tier tribunal until the order becomes final.

New investigatory powers already in force enable councils to ask questions, enter business premises and seize documents.

Will the new legislation work?

The Renters Rights Act 2025 does not exist in isolation. Its success is dependent on a courts and tribunal system which actually works. The abolition of the accelerated possession procedure now means that all possession claims will have to go to a court hearing, where the landlord will need to prove its case. Taking account of the time needed to get to a possession hearing followed by a bailiff eviction, that eviction process could take up to a year. Add to that the longer lead-in times introduced by the 2025 Act for all grounds of possession, save those based on antisocial behaviour.

It also means more work for first tier tribunals, who will be tasked with adjudicating appeals against fixed penalties. And of course it means more work for local housing authorities tasked with enforcing the new regime. This workload could increase in 2027 when the government introduces its expected landlord registration scheme, which councils will also be required to police. By 2035, the government is also expected to have introduced its Decent Homes Standard for all residential lettings.

How will it affect the Lettings Market?

The speed at which the legislation is being introduced and the fact that it applies retrospectively, means that many private landlords may not even have a chance to get out of the market. Any landlord who has not served their section 21 notice before 1st May 2026 and issued possession proceedings by the cut off date of 31st July 2026, will be caught by the new regime. We could also see a growing professionalisation of the residential lettings market, as small residential landlords drop out and are replaced by larger professional landlords who are better able to navigate the new legislation. It could also provide opportunities for social landlords to replenish their housing stock as more ex-rental properties come onto the market.

We could also see the re-emergence of avoidance schemes, such as company lets. Or private landlords choosing to lease their properties through intermediaries, such as local authorities or housing associations, who can then shoulder those landlord responsibilities and guarantee a return of vacant possession at the end of the lease. End

First Published in Local Government Lawyer – March 2026

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V. Charles Ward Is a senior property lawyer with HB Public Law and the author of Housing Regeneration: a plan for implementation. He is also the author of The Renters’ Rights Act: a practical guide, which is being published through Taylor and Francis and will be released later this year

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A Landlord who fails to do this could be fined up to Â£7,000

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Once the Renters’ Rights Act 2025 takes effect on the 1st May 2026, private residential landlords in England will have only 1 month to get tenancies correctly documented or face fines of up to £7,000. This means serving existing tenants with a tenant information sheet explaining their new rights under the 2025 Act. These new rights can include lifetime security of tenure, protection against unfair rent increases, the ability to vacate on as little as 2 months prior written notice, and the outlawing of discrimination against tenants who are on welfare or who have children living with them. For landlords who get it wrong, there may be no second chances. Just a financial penalty.

For new tenancies, or those which were previously undocumented, landlords must issue tenants (as well as prospective tenants) with a written statement of terms containing all the information required by the Assured Tenancies (Private Rented Sector) (Written Satement of Terms etc and Information Sheet) (England) Regulations 2026. The content of that written statement of terms must conform exactly to the requirements of the schedule to the 2026 Regulations. That statement can either be standalone or incorporated in a formal tenancy agreement. The Information Sheet to be served on existing tenants must be downloaded as a PDF and must be issued to tenants either as hard copy or by email but exactly in the prescribed format. To help landlords with this, the Ministry of Housing Communities and Local Government has issued guidance published 20th March 2026 titled, ‘The Renters’s Rights Act Information Sheet 2026: The information sheet about the Renters’ Rights Act 2025 that landlords and their agents must give to tenants’.

Whilst there is no prescribed template for the statement of terms, it is important that particular care is taken to include within these statements of terms any legitimate non-fault grounds of possession to which the tenancy may be subject. Landlords who fail to do this may later have difficulty in recovering possession even when they might otherwise have had legitimate grounds to do so.

The MHCLG Guidance includes the following advice:

  • the information sheet does not have to be given to lodgers but must be given to every tenant named on the tenancy agreement
  • the tenant information sheet is only valid when downloaded from the Government website;
  • the information sheet must be given to tenants either by printing a hard copy and posting or hand delivering to tenants or alternatively sending a PDF electronically as an attachment to an email or text message where it is appropriate to do so. However it is not sufficient just to email or text a link to a tenant;
  • the legislation does not require landlords to change or reissue an existing written tenancy agreement;
  • where a tenancy was informally entered into before 1st May 2026 without a written agreement, the landlord must provide a statements of tenancy terms (see above);
  • Social landlords do not need to provide this information sheet.
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Stamp Duty Land Tax – When it all goes wrong

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Since it replaced the centuries old Stamp Duty in 2003, Stamp Duty Land Tax has become one of the UK’s most complex taxes.

Within 14 days of completion of any significant property transaction, it is the responsibility of the buyer or leaseholder to file a stamp stamp duty land tax return and pay any applicable duty on the transaction. This is usually uploaded electronically by the conveyancer who completed the purchase, save that legal responsibility for ensuring that everything contained within the return is correct and that the correct duty is paid, is placed firmly on the client-purchaser, not the conveyancer who acted on the purchase.

In terms of complexity, a stamp duty land tax return can be compared with any complex self-assessment tax return. And it is the responsibility of the taxpayer to get it right as in most cases, HMRC take the information provided on trust unless there is something specific which raises query.

Most purchaser – clients are not tax experts and will rely on the advice given by their conveyancer as to how much stamp duty land tax they will be required to pay. However they must still make sure that the information they provide to the lawyer is correct, particularly as regards any second homes. Once the client has seen and approved the draft stamp duty land tax tax return, the conveyancer will upload it on the HMRC portal. Almost instantaneously, that conveyancer will receive back an electronic certificate in form SDLT5, confirming that the stamp duy tax return has been uploaded and received, even if the duty itself has not yet been paid. It is that SDLT5 which will then enable the conveyancer to register the transaction and pay the stamp duty from money held on account from the particular client. There are also some cases involving trusts, where the issues are so complex, that the conveyancer should advise their client to seek specialist tax advice before approving the stamp land tax return for upload.

Because of the complexity of some conveyancing transactions, there is always a risk of miscalculating the amount of duty chargeable on a particular transaction. The risk applies both ways. There’s firstly the risk that you may overpay stamp duty on a transaction because your conveyancer has not identified a legitimate relief to which you are entitled. Or you may accidentally fail to declare something which would otherwise have had the effect of increasing the tax liability which would otherwise be payable. Either way, the mistake is expensive.

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London Borough of Redbridge v G Romford County Court 5th February 2025 – Housing Possession

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I’m sorry but if you thought you were going to be able to download a transcript of this important judgement, I’m afraid that you are going to be disappointed. That’s unless you are prepared to pay the court stenographer yourself to listen to the tapes and type up that transcript. And that’s going to be expensive. Because Romford County Court is not a court of record. But the case is important because it reminds local authority conveyancers what can happen if they complete on the purchase of a property which happens to be occupied by a residential tenant. Even if that tenant had previously occupied under a shorthold tenancy, which could be ended as any time on 2 months written notice. What is worse, is that an existing shorthold tenancy automatically then converts into a fully secure tenancy under the Housing Act 1985. What a bonus for that residential tenant! Not only do they now have lifetime security. They’ve also got a statutory right to buy. And all because of a simple conveyancing error.

It is standard conveyancing practice that the existence of any residential adult occupier of the property must be disclosed to the buyer before contracts are exchanged. That will include anyone occupying under a shorthold tenancy. If this is not done and those occupancy rights are not brought to an end before completion, the buyer will take subject to those rights of occupation forevermore. Which was what had happened in this case. In fact there was nothing to suggest that the landlord had taken any formal step to terminate the shorthold tenancy, before that transaction completed.

A further physical inspection should take place on the morning of completion just to make sure that the property is in fact vacant before the balance of the purchase money is released. Getting it wrong is always expensive.

business, Law

Tax Efficient Strategies for Local Authority Property Transactions

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Whilst Increases in stamp duty land tax taking effect 1st April 2025 are mainly geared towards private residential purchasers, local authority purchasers may not be not immune. 

Save where a blanket relief can be claimed or for the very smallest transactions in terms of value, all local authority purchases will be affected by the reduction in the basic stamp duty threshold from £250,000 to £125,000. Add to that the 5% SDLT surcharge which is now added to all corporate residential purchases, including those below the new basic £125,000 threshold. Like every petrol purchase, SDLT can involve a tax-on-tax, particularly where a transaction is standard rated.

All of this is dead money which sucks resources out of tight local authority budgets, which might otherwise be applied towards regeneration. And whilst local authority conveyancers are not expected to have the expertise of a tax accountant, it is important to know enough about the calculation of property taxes to ask the right questions and to be able to query any tax-advice which appears to be wrong. It is about knowing what reliefs are available and being able to structure a complex transaction in the most tax efficient way. 

Although there are many different taxes which can potentially affect property transactions, currently the three main property taxes are Stamp Duty Land Tax; Value Added Tax and Community Infrastructure Levy (where the council pays money to itself). We now look at each of these taxes in turn and examine the particular reliefs which are available to local authorities.

Stamp Duty Land Tax

The first thing to note is that different stamp duty land tax rates apply to residential and non-residential purchases. Generally, non-residential rates are more beneficial, not least because the 5% surcharge does not apply. 

Although the difference between a residential and a non-residential transaction might seem obvious, that is not always the case. A purchase of a property which combines a mix of residential and non-residential use will be deemed non-residential. And although multiple dwelling relief has now been abolished, a local authority can still achieve a significant tax saving by electing to treat a single purchase of six or more dwellings as non-residential, by utilizing the exemption contained in Section 116(7) of the Finance Act 2003. The main blanket SDLT reliefs for local authorities are:

  • Registered Social Landlord Relief – which is only available to those local authorities who fall within that RSL category and then only for those affordable housing purchases which are grant-funded.
  • Transfer of property between companies – which may apply when a local authority is transacting with its own corporate subsidiary.
  • Compulsory Purchase Relief – which applies where a local authority is purchasing property under the umbrella of a compulsory purchase order (whether confirmed or not) but only where it is intended that the property acquired will be transferred on to a development partner. It will not apply to property acquired for development which the local authority is intending to carry out itself, although other reliefs might apply. The key purpose of compulsory purchase relief is not to make a transaction tax free but to avoid the double taxation which would otherwise apply when land is purchased and then transferred away in a back-to-back transaction.
  • Subsale relief – which, like CPO relief, Is intended to avoid a double tax liability in circumstances where  a party contracts to purchase property and, before that transaction has completed, has transferred its contract to another party, who then steps into its shoes.

Even where blanket relief is not available for a complex transaction, it is still possible to reduce the stamp duty liability on a development transaction by structuring it in a way which ensures SDLT is only payable on the land value and not the entire development value of the transaction. Structuring a transaction in this way will generally involve separate standalone contracts for the land acquisition and another for the carrying out of the development, and with the bringing forward of completion of the land-transaction to Golden Brick, or earlier, which is the point at which a development becomes officially recognized as ‘residential ‘ and therefore zero rated for the purposes of VAT(see below). The key reference point when structuring a development purchase has to be SDLTM04015 of the Stamp Duty Land Tax Manual, “Scope – how much is chargeable: sale of land with associated construction contract Para 10 schedule 4 Finance Act 2003, which refers to the decision in Prudential Assurance Co Limited v IRC [1992] when Identifying the subject matter of the transaction for the purposes of stamp duty.

TOGC (Transfer as a going concern), also provides partial relief for some investment purchases, such as the landlord interest in a trading estate which is already fully let and where the local authority is stepping into the shoes of the previous landlord. Where a TOGC applies, SDLT will only be calculated on the net purchase price and not any additional VAT element. However this partial exemption can only apply when both the seller and the purchaser had waived VAT exemption before the transaction completes.

A practical issue for many local authority conveyancers, is how to ensure that tax which falls due on a transaction is paid within the required 14 days to avoid the automatic penalties which will otherwise apply. Any payment has to be correctly referenced so that it can be easily traced by HMRC and avoid follow-up query. Compliance with this 14-day deadline may not be problematic for a conveyancer who already holds funds on account. But it can be problematic for a conveyancer who is dependent on another department to ensure that payment is transmitted in a correct and timely way

Value Added Tax

A primary issue in any complex transaction is not only whether that transaction has been opted to tax but whether it should be opted to tax, to enable efficient recovery of vat on building or other construction costs. That is something which may require specialist tax advice. Remember also that a freehold sale of commercial new build is automatically subject to vat.. For all other cases the issue is whether there has been an option to tax. The default position is that non-residential transactions are exempt from vat. However the standard 20% will apply if it has been opted to tax. In most cases the imposition of a 20% VAT liability will be cost neutral in circumstances where the paying party is able to recover its VAT outlay as an input. Although as we have already seen, the charging of vat on a land transaction also has implications for the calculation of SDLT (see above). The imposition of vat on a property transaction will also be problematic for a charity or housing association which is unable to recover its vat as an input. That is the reason why many housing associations are advised to complete their purchases at ‘ golden brick’, when the transaction becomes zero rated for the purposes of VAT. Such zero rating also makes it easier for that housing Association to recover VAT on its own construction costs.

The issue of VAT on local authority transactions is particularly complex because it cannot be assumed that a local authority will be able to recover all of its VAT outlay, which in turn is dependent on whether the particular transaction can be classed as business, non-business or exempt. Official guidance on these issues is provided by VAT Notice 749: Local authorities and similar bodies, which helps local authorities and other public bodies decide which activities are business or non-business. Again, this is an issue on which specialist tax advice may be needed.

Community Infrastructure Levy (CIL)

Whilst affordable housing development by a registered social landlord will normally qualify for mandatory relief against CIL there are special rules for claiming it. The general rule is that Mandatory Social Housing Relief has to be officially claimed before the development commences and then only by an organization which is either the freeholder or which has a significant leasehold interest in the land affected. This is something which needs to be borne in mind when a local authority is working with a development partner which has yet to acquire its proprietary freehold or leasehold interest in the property but is still contractually obliged to get its development underway. In those situations it may be the local authority itself and not the development partner which has to make the formal application for that relief.

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V. Charles Ward Is a Senior Property Lawyer with HB Public Law and author of Local Authority Conveyancing Law and Practice (UK)