Category: Blog

On 01 May 2026, the Renters Rights Act 2025 will introduce the most significant change to residential possession law in a generation. 

While the Act abolishes section 21 notices, it has also made significant changes to the current statutory grounds for possession. Amongst these changes are to the ‘Rent Arrears’ grounds (Ground 81, 10 and 112) which allows landlords to commence possession proceedings where the tenant is in rent arrears. 

Mandatory Ground 8

Ground 8 is the only mandatory rent arrears ground. This means that if the statutory threshold is met, the Court must make a possession order. If the requirements for ground 8 have not been made out, the mandatory ground cannot be relied upon. Because of this strict threshold, Ground 8 can often be used with discretionary grounds to give the Court an alternative basis for making an order if the arrears fall below the mandatory threshold before the hearing.

In order to rely on ground 8, at both the date of service of the section 8 notice, and the date of the hearing, the tenant must be in either thirteen weeks’ worth of rent (if rent is payable weekly), or 3 months’ worth of rent (if rent is payable monthly). There are no other rental periods listed as the Renters Rights Act 2025 also amended the rent periods for new assured tenancies.3 See our guide on other changes brought in by the Renters Rights Act here.

Discretionary Grounds 10 and 11

The Renters Rights Act 2025 did not alter grounds 10 or 11, so they will continue to operate in the same way as before namely;

• Ground 10 will apply where the tenant is in some arrears at the date of service of the notice and at the date of the hearing (with there being no requirement for the tenant to be in at least two months worth of arrears
• Ground 11 will apply where there is persistent delay in paying rent. 

Even in instances where the Court is satisfied that the ground is made out, the Court may, but does not have to, make a possession order. Because the Court has discretion, it will consider the tenant’s circumstances, the reasons for the arrears, any repayment proposals, and the landlord’s conduct. 

Other Considerations for Using Grounds 8, 10 and 11

Historically, the deposit rules would be relevant to a section 8 possession claim in the context of a potential counterclaim from a tenant should a landlord fail to properly protect the tenancy deposit. The correct protection of a tenancy deposit did not, strictly speaking, impact upon the validity of the s8 notice. However, under the new Act, deposit compliance is now a statutory prerequisite for obtaining a possession order. Any deposit taken from the tenant must be correctly protected in a government approved scheme and the relevant prescribed information served4.

Before making an order for possession, the Court must assess whether the tenant is actually receiving Universal Credit and whether this is the reason the arrears have arisen. The arrears must be directly linked to delays or failures in Universal Credit payments, and not to other causes such as the tenant intentionally withholding rent.5 

What does this mean for you?

With section 21 abolished, landlords will be relying on the rent arrears grounds far more frequently. Ground 8 offers a mandatory route to possession, but only where the strict arrears threshold is met. Grounds 10 and 11 remain valuable alternatives, particularly where arrears fluctuate or the tenant has a history of late payment.

In practical terms, landlords will need to plan ahead, ensure full compliance, and exercise care when preparing and serving notices. The new regime is more demanding than the previous no-fault system. Professional advice is therefore crucial to ensure notices are valid, risks are controlled, and the possession process is managed correctly from the outset.

With the abolition of section 21 and the introduction of a more regulated possession system, landlords will need to adapt quickly. The Landlord Group can help landlords assess their position, manage risk, and ensure they are fully prepared for the new requirements.

Bibliography

1 Renters Rights Act 2025, Schedule 1, Section 3, Ground 8

2  Housing Act 1988, Schedule 2

3Renters Rights Act 2025, Section 1 ss 3

4 Renters Rights Act 2025, Section 26

5 ibid

On 01 May 2026, the Renters Rights Act 2025 will introduce the most significant change to residential possession law in a generation. 

While the Act abolishes section 21 notices, it has also made significant changes to the current statutory grounds for possession. Amongst these changes are to the ‘Occupation’ ground (Ground 11) which allows landlords to seek possession where the landlord requires the property as the only or principal home of any of the following groups of people:

(a) the landlord;
(b) the landlord’s spouse, civil partner, or a person with whom the landlord lives as if married or in a civil partnership;
(c) the landlord’s—
    (i) parent;
    (ii) grandparent;
    (iii) sibling;
    (iv) child;
    (v) grandchild;
(d) a child or grandchild of a person mentioned in paragraph (b).

Under the revised framework, landlords must show a genuine intention to occupy the property in order to rely on Ground 1. Before serving notice, the tenancy must have been in place for at least one year². Any deposit taken must also be properly protected in an approved scheme, with the prescribed information served³.

Once these conditions are satisfied, the landlord may serve a section 8 notice and, if the tenant does not leave, issue a possession claim.

Financial Penalties and Misuse 

Ground 1 carries significant risks if used improperly. Penalties may be imposed where, within twelve months of serving the notice, the landlord lets the property on a term of less than 21 years, licenses it, or re-markets it⁴. A penalty will only arise if the tenant vacates voluntarily within four months of service⁵ and no possession order has been made⁶.

Where misuse is established and the tenant has left because of it, the local authority may impose a financial penalty of up to £7,000.00⁷

What does this mean for you?

Landlords should only serve notice where they (or another qualifying person) genuinely intend to move into the property. Any subsequent decision to re-let or re-market the property may expose the landlord to enforcement action and financial penalties.

In practical terms, landlords will need to plan ahead, ensure full compliance, and exercise care when preparing and serving notices. The new regime is more demanding than the previous no-fault system. Professional advice is therefore crucial to ensure notices are valid, risks are controlled, and the possession process is managed correctly from the outset.

With the abolition of section 21 and the introduction of a more regulated possession system, landlords will need to adapt quickly. The Landlord Group can help landlords assess their position, manage risk, and ensure they are fully prepared for the new requirements.

Bibliography

1 Renters Rights Act 2025, Schedule 1, Section 3, Ground 1

2 ibid

3  Renters Rights Act 2025, Section 26

4 Renters Rights Act 2025, Section 13

5 Renters Rights Act 2025, Section 15

6 ibid

7 ibid

On 01 May 2026, the Renters Rights Act 2025 will introduce the most significant change to residential possession law in a generation. 

While the Act abolishes section 21 notices, it also establishes a new framework of statutory grounds for possession. Amongst these additions is the new ‘Sale of Property’ ground (Ground 1A1) which allows landlords to seek possession where they intend to sell their interest in the property. 

Under the new rules, landlords will be required to demonstrate a genuine intention to sell in order to rely on Ground 1A. Although the Act does not prescribe the form this evidence must take, landlords should expect that some indication of a real and settled decision to sell may be expected. There is no requirement for the sale to complete; the statutory test concerns the landlord’s genuine intention at the time the notice is served.

Before serving notice, landlords must also ensure that the tenancy has run for at least one year2. In addition, any deposit taken from the tenant must be correctly protected in a government approved scheme and the relevant prescribed information served3. 

Once these requirements are met, a section 8 notice must be served, followed by a possession claim if the tenant does not vacate.

Financial Penalties and Misuse 

One of the fundamental risks to using the new Sale of Property ground is the severe penalties that may be ordered against landlords in the event of misuse of the new grounds. 

There are several requirements for these penalties to apply. The landlord has, within twelve months of the date of service of the notice, let the property to another for a term of less than 21 years, licenced or re-marketed the property4. The penalty will only be issued if the tenant has moved out of their own accord within four months of the notice being served5 and no possession order has been granted6. 

If a landlord is found to have misused the grounds for possession, and the tenant has vacated as a result of the misuse, the local authority may issue a financial penalty in the maximum sum of £7,000.007.

What does this mean for you?

The penalties for misuse mean that landlords should not serve notice unless they have a genuine intention to sell. Any later decision to re-let or re-market the property may expose the landlord to enforcement action and financial penalties.

In practice, this means landlords will need to plan ahead, ensure their compliance position is sound, and take care when preparing and serving notices. The new regime is more complex than the previous no-fault system. Professional advice is therefore essential to ensure that notices are valid, risks are managed, and the possession process is handled correctly from the outset.

With the abolition of section 21 and the introduction of a more regulated possession system, landlords will need to adapt quickly. The Landlord Group can help landlords assess their position, manage risk, and ensure they are fully prepared for the new requirements.

Bibliography

1 Renters Rights Act 2025, Schedule 1, Section 3, Ground 1A

2 ibid

3  Renters Rights Act 2025, Section 26

4 Renters Rights Act 2025, Section 13

5 Renters Rights Act 2025, Section 15

6 ibid

7 ibid

Landlords could face a prison sentence for breaching the Government’s ‘Right to Rent’ checks in a series of measures to tackle illegal immigration, announced by the Government over the weekend. Proposals will be included in the forthcoming Immigration Bill that will require landlords to check the immigration status of prospective tenants, allow landlords to evict illegal immigrants without going to court in some cases, and introduce tougher penalties, including prison, for landlords who persistently let to illegal immigrants. The Immigration Bill will introduce a Home Office notice intended to “remove the protections currently afforded to illegal immigrants by the Protection for Eviction Act and the Housing Act 1988”. The expectation is that this notice will be clear and unambiguous, empowering landlords to “take steps to evict the tenant, after a short notice period, without the need for a court process for repossession, unless eviction requires the use of force.” Repeatedly failing to evict illegal immigrants would be a new offence carrying maximum penalties of five years’ imprisonment or a fine for convicted landlords. The National Landlords Association (NLA) chief executive Richard Lambert told Radio 4 the plans could lead to tenants “doing very desperate things” and violent confrontations. Lambert accused the government of introducing the plan “out of the blue” in response to the Calais migrant crisis. The Government also plans to create a blacklist of criminal landlords and letting agents, with a ban on letting for those repeatedly convicted of housing offences. Communities Secretary Greg Clark said the government would crack down on “rogue landlords who make money out of illegal immigration”. Residential Landlords Association (RLA) chairman Alan Ward questioned why responsibility for immigration had fallen on landlords and letting agents rather than employers. “The ability to evict illegals may answer the problem of abandonment if an illegal immigrant is removed by the authorities, but is a potential minefield if we get it wrong. Just because a landlord has the right to evict, it doesn’t explain how to go about it,” he said. “There must be better support to ensure landlords are able to validate tenants’ right to rent and what to do when a tenant loses that right. We have real concerns as the Home Office have failed to allocate any meaningful budget to informing landlord, agents and tenants about the right to rent process.” A pilot Right To Rent project has been operating in Birmingham, Wolverhampton, Dudley, Sandwell and Walsall since last year. Since December, landlords and agents in these areas have been required to check the immigration status of all new adult tenants, sub-tenants and lodgers entering into new tenancies to assess whether they have right to rent in the UK. Section 20 to 37 of the Immigration Act 2014 contains provisions to make it compulsory for landlords to check the immigration status of all new adult tenants.

The number of people evicted by their landlords rose 46% in England and Wales, since benefit cuts came into effect in 2011, official statistics suggest. More than 43,000 households in rented housing were evicted in the 12 months to June, according to the Ministry of Justice. In addition, rents rose across the UK, with the average rental price for a home reaching £1,000 a month, up by £100 from the previous year, HomeLet data showed. The figures also showed that rental increases were growing faster in the south-west of England. Homeless charity Shelter’s chief executive Campbell Robb pointed out that many people were being unable to afford a home, and urged the government to “invest in building genuinely affordable homes.” “Every day at Shelter we see the human cost of the country’s unfolding affordability crisis with growing numbers of families finding themselves on the verge of homelessness, and petrified that any small drop in income could leave them with the bailiffs knocking at the door.” Statistics also revealed that landlords willing to rent people who receive state benefits fell since 2011, and that less than 10% of landlords lowered rents in response to the cuts. A spokesman for the Department for Communities and Local Government said repossessions continued to fall, being 17% lower than this time last year, and that the numbers of landlord possession claims were down 14% on the previous quarter at their lowest point since 2012 “This Government has kept strong protections to guard families against the threat of homelessness. We’ve increased spending to prevent homelessness with over £500 million made available to help the most vulnerable in society and ensure we don’t return to the bad old days when homelessness in England was nearly double what it is today.”

The budget is often full of surprises, and none more so than the recent Summer Budget announced by Chancellor Osborne. It has been a long time since a Budget has included so many changes effecting landlords. The Chancellor has set out plans to cool the buy-to-let market as it could be seen as a problem if there are any future downturns or property prices crashes. The plans laid out include changes to the way income is taxed on rental property income, reduced tax relief for higher earner landlords and also an increase in the amount of regulation and requirements for renting a property. Whether the buy-to-let industry has helped the property price boom or not, it is now something that is clearly on the radar of the government for the foreseeable future.

The Landlord Group’s Chris Sharpe is back in action on Channel 5’s Bad Tenants, Rogue Landlords, working on behalf of landlords to secure their property from illegal tenants and squatters. In the first episode of the new show, while a landlord is away working in Mexico, squatters take over his Cheshire home. Chris Sharpe goes to the three-bedroom bungalow to serve the squatters an eviction notice. “I will explain to them, in no uncertain terms, they will have 24 hours,” says Chris. “That is it.” While the owner was 4,000 miles away, the home had clearly been broken into, and the squatters had left the house outside trashed. “Whoever’s doing it, they need dealing with.” The only one home was a dog, so Chris left eviction notices on the front and back doors. 24 hours after the eviction notice was served, Chris goes with police to evict the squatters. Again, they find nobody in but the dog, but the home is clearly being lived in. Upon finding the home empty, the police leave and Chris begins to move out the squatters’ belongings. Around an hour after police leave, the squatter turns up at the home, a woman who had been left jobless and homeless after a back injury. “There’s no happy ending,” says Chris. “We’ve still got to deal with this. But this shouldn’t be on Carl’s shoulders. This is not his problem to carry.” Bad Tenants, Rogue Landlords returns at 8pm, Thursday 19th April on Channel 5. Squatting and trespassing are major problems for landlords across the country. At The Landlord Group, our dedicated team are committed to evicting squatters quickly and cost effectively. Read more about our Evicting Squatter services.

The National Landlords Association (NLA) has highlighted some important issues for landlords to consider. The trade body for UK landlords pointed out that the recession resulted in increased tenant demand and higher rents in many areas. However, it is still important for landlords to keep a close eye on their finances. In line with this view, the NLA has issued ten top tips for landlords. 1. Thoroughly research the rental market in your area to< make sure you are charging the right level of rent and not pricing yourself out of the market". 2. Buy-to-let borrowers having difficulty keeping up with mortgage repayments should speak to their lender and try to arrange a new repayment plan. If you are coming to the end of a deal, search the market for a mortgage which best suits your needs. 3. Marketing your property is important to ensure you do not experience rental voids (periods when the property is unoccupied). 4. Courtesy, reliability and availability will make for a happier tenancy all round. Communication is critical. 5. Landlords should carry out proper checks on prospective tenants, including credit checks, bankruptcy searches and previous residency information. 6. Complying with the long list of rules and regulations for landlords is imperative to ensure your tenants are happy and you do not risk your reputation and your bank balance. This includes placing tenants’ deposits in a Government-approved protection scheme. 7. Drawing up an inventory at the beginning of the tenancy will reduce the likelihood of any disputes once the tenant moves out. 8. Taking out insurance may also be a good idea. Your lender will require buildings insurance, but the NLA also highlights the need for cover against injury to tenants and their guests, and insurance for void periods. 9. Start a rainy day fund to cover any emergency expenditure on repairs or maintenance. 10. Join a landlord association to benefit from the advice and experiences of other landlords. “Proper advice for landlords is critical. By following the NLA’s top tips, landlords could increase their chances of getting the most from their properties at a time when the wider economic outlook is not looking so good.”

Thousands of landlords are setting up companies in a move to allow them to avoid new taxes on rental income, potentially cutting the Treasury’s tax haul by hundreds of millions of pounds, a Telegraph study has found. Under rules coming into force next week, buy-to-let property investors in the higher rate tax bracket will face new limits on their ability to claim mortgage interest as a cost to offset against their rental income, blowing a hole in some landlords’ financial plans. But if the investor sets up a company, the bill no longer applies. A study of Companies House and Office for National Statistics data by The Telegraph indicates that more than 4,560 property companies have been incorporated in the past three months alone. That is a rise of just over 50pc on the level seen in the same period a year ago, and indicates the volume of landlords taking the opportunity to limit the rise in their tax bill. The true number is likely to be higher, as investors have had since the Summer Budget in July 2015 to plan for this change.

What’s changing?

Anyone who buys additional residential property, including second homes and buy-to-lets, will have to pay an extra 3 percentage points in stamp duty from April 1, 2016. The additional charge applies above the current “stamp duty land tax” rates. This means there will be 3pc tax (currently zero) to pay on homes worth up to £125,000, 5pc tax (instead of 2pc) on homes that cost between £125,001 and £250,000, and 8pc (currently 5pc) on homes worth between £250,001 and £925,000. Homes worth up to £1.5m will be subject to 13pc stamp duty and those over this amount will incur a 15pc charge. In practice this means that someone buying a £450,000 house will have to pay an extra £13,500 of tax. Anyone buying a second home has 36 months to sell their original property. They can then get a refund on the extra tax. In addition, anyone who sold their home before November 2015 but does not currently own their own home has until November 2018 to buy a new one without paying the extra tax. Corporate investors will also benefit from the falling rate of corporation tax, which is due to be cut to 17pc in the tax year 2020-2021, as well as reduced capital gains tax charges. There are additional costs to setting up a business, however, including administrative expenses and taxes on dividends or salaries when the income is paid out. In addition, the average mortgage for a company costs 0.8 percentage points more than a loan to an individual, according to brokerage Mortgages for Business. As a result, Gary Heynes, national head of private clients at tax advice and accounting group RSM UK, believes incorporating only makes sense for investors with more than 10 properties, and a plan to hold those investments for the long term.

Changes made by Chancellor George Osborne to the rental market will affect almost half of landlords, a trade body has claimed. Osborne announced in his July Budget that landlords would soon only be able to claim for actual wear and tear. At present they are able to claim a set amount, regardless of the level of wear. Research by the National Landlords Association found that this rule will affect 47% of all landlords. The rules will apply only to furnished properties and the trade body said 24% of all landlords operated exclusively in this sector. Some 22% rent out a mixture of furnished and unfurnished properties while more than half (53%) operative only on an unfurnished basis. There is a consultation on the new system which will run until 9 October 2015. The new rules will take effect on from 6 April 2016 for Income Tax purposes and 1 April 2016 for Corporation Tax. They will cover the cost of replacement furniture, furnishings, appliances and kitchenware provided for tenants including:

• Movable furniture and furnishings
• Televisions
• Fridges/freezers
• Carpets and flooring
• Curtains
• Linen
• Crockery or cutlery

Chris Norris, head of policy at the National Landlords Association said: “We fully understand the frustration of those landlords who let exclusively on a furnished basis as the removal of this allowance will very likely represent a reduction in the relief they can claim. “However, it will come as a welcome revision for those letting a mixed portfolio, unfurnished, or part-furnished property as the replacement system will allow them to deduct legitimate revenue expenses in the future. “The NLA has broadly welcomed these proposals as it should lead to a fairer system for more landlords. However, as we transition from one system to another, we will push to make sure that any landlords who’ve made recent investments with the expectation of offsetting the cost over a number of years using the current allowance, will not be disadvantaged.”