Renters' Rights Act 2025: What It Means for Property Licensing

<p>The Renters' Rights Act 2025 (<a href="https://www.legislation.gov.uk/ukpga/2025/26/contents" rel="noopener noreferrer" target="_blank">ukpga/2025/26</a>) received Royal Assent on 27 October 2025 and represents the most significant overhaul of the private rented sector in England in a generation. Several of its provisions are already in force, while others will be brought in by secondary legislation over the coming months. This article explains what has changed, what is coming, and what landlords should do now.</p> <h2>Section 21 is abolished</h2> <p>The most headline-grabbing change is the abolition of Section 21 no-fault evictions. Landlords can no longer serve a Section 21 notice to end a tenancy without giving a reason. All assured tenancies are now periodic by default, meaning tenants can remain in their homes until they choose to leave (typically with two months' notice) or until a landlord successfully obtains possession through one of the new statutory grounds.</p> <p>The new possession grounds are set out in Schedule 1 to the Act. They include fault-based grounds (rent arrears of three or more months, anti-social behaviour, damage to the property) and non-fault grounds (the landlord genuinely intends to sell, or genuinely intends to move in themselves or a close family member). For the non-fault grounds, landlords must give four months' notice and are prohibited from re-letting or marketing the property for 12 months after possession is obtained.</p> <p>The threshold for rent-arrears evictions has also risen. Landlords must now demonstrate at least three months of arrears (up from two) before a court will grant possession, and the notice period for such cases has extended from two weeks to four weeks.</p> <h2>Civil penalties have risen to £40,000</h2> <p>The civil financial penalty regime under the Act came into force on 1 May 2026. Local authorities can now impose penalties of up to £7,000 for breaches and up to £40,000 for the most serious offences. There is no statutory minimum, so councils retain discretion to set proportionate amounts.</p> <p>The offences covered include unlawful eviction or harassment, failure to provide a written statement of tenancy terms, rental bidding (soliciting or accepting offers above the advertised rent), and letting a property that is not registered on the Private Rented Sector Database once that requirement comes into force. Critically, offences under Section 72 of the Housing Act 2004 (unlicensed HMOs) and Section 95 of the Housing Act 2004 (properties subject to selective licensing) are also subject to this new penalty ceiling.</p> <p>A landlord or agent who receives two or more civil penalties within a 12-month period may be added to the database of rogue landlords and property agents, which can affect their ability to operate in the sector.</p> <h2>The Private Rented Sector Database</h2> <p>Part 2 of the Act establishes a mandatory Private Rented Sector (PRS) Database. All landlords of assured and regulated tenancies in England will be required to register themselves and their properties. The database will record the landlord's name and contact details, the address of each let property, and evidence of compliance with key legal obligations.</p> <p>Registration on the PRS Database will be a prerequisite for using certain possession grounds. A landlord who has not registered will be unable to rely on the grounds for selling or moving in, and courts will be able to refuse possession applications from unregistered landlords. Local authorities will be able to use the database to target enforcement activity more effectively.</p> <p>The PRS Database is not yet in force. The government must bring it in by secondary legislation and has not yet announced a commencement date. Landlords should monitor official announcements and prepare to register once the date is confirmed. Penalties for non-registration will be up to £7,000 for initial failure and up to £40,000 for repeated or fraudulent non-compliance.</p> <h2>How the PRS Database differs from licensing</h2> <p>It is important to understand that the PRS Database is a national landlord registration system, not a licensing scheme. Selective licensing, additional licensing, and mandatory HMO licensing are council-level schemes that require a landlord to hold a licence for a specific property in a designated area. The PRS Database is a separate, England-wide obligation that will apply to all private landlords regardless of whether their property is in a licensing area.</p> <p>The two regimes will run in parallel. A landlord in a selective licensing area will need both a selective licence from their local council and a registration entry on the national PRS Database. Failure to comply with either carries separate penalties.</p> <h2>Decent Homes Standard extended to the private rented sector</h2> <p>For the first time, the Decent Homes Standard (DHS) will apply to privately rented homes. The DHS currently applies to social housing and sets minimum standards for structural condition, heating, insulation, and freedom from serious hazards. The Act enables regulations to extend these requirements to the private rented sector, with local councils given enforcement powers including civil penalties of up to £7,000.</p> <p>The Decent Homes Standard extension is not yet in force and is subject to secondary legislation. The government has indicated it will consult on the detail before bringing it into effect.</p> <h2>Awaab's Law extended to the private rented sector</h2> <p>Awaab's Law, named after Awaab Ishak who died in 2020 following prolonged exposure to mould in his social rented home, came into force for social housing on 27 October 2025. The Renters' Rights Act 2025 extends the same principles to the private rented sector. Once in force, private landlords will be required to investigate and address hazards such as damp and mould within specified timeframes. Failure to comply will give tenants the right to pursue enforcement action through the courts.</p> <p>The PRS extension of Awaab's Law is not yet in force and is subject to secondary legislation.</p> <h2>The Private Rented Sector Ombudsman</h2> <p>The Act also creates a new Private Rented Sector Landlord Ombudsman. All private landlords in England will be required to join an approved redress scheme. Tenants will be able to bring complaints about their landlord's conduct to the Ombudsman, who will have the power to award compensation and require remedial action. The Ombudsman scheme is not yet operational and will be established by secondary legislation.</p> <h2>Bidding wars are banned</h2> <p>The Act prohibits rental bidding. Landlords and agents must not solicit, encourage, or accept offers above the advertised asking rent. This applies from the point of advertisement. A civil penalty of up to £7,000 applies for a first breach and up to £40,000 for subsequent breaches.</p> <h2>What landlords should do now</h2> <p>Several provisions are already in force. Landlords should take the following steps immediately:</p> <ul> <li>Stop serving Section 21 notices. These are no longer valid.</li> <li>Review your grounds for possession. If you need to regain your property, identify the correct statutory ground and ensure you meet its conditions before serving notice.</li> <li>Check your civil penalty exposure. If your property is in a selective or HMO licensing area and you do not hold a valid licence, you are now exposed to penalties of up to £40,000.</li> <li>Do not advertise above asking rent or accept bids above the listed price.</li> </ul> <p>For provisions not yet in force, landlords should:</p> <ul> <li>Monitor government announcements on the PRS Database commencement date and prepare to register promptly.</li> <li>Assess properties against the Decent Homes Standard criteria and address any deficiencies before the standard is extended to the private rented sector.</li> <li>Implement processes for identifying and addressing damp and mould in line with the principles of Awaab's Law.</li> </ul> <p>If you are unsure whether your property is in a selective or additional licensing area, you can <a href="/">check instantly using Tuxa's free property search</a>. Knowing your licensing status is the first step to avoiding the new higher penalties.</p> <h2>Key dates and figures at a glance</h2> <table> <thead><tr><th>Provision</th><th>Status</th><th>Date</th></tr></thead> <tbody> <tr><td>Royal Assent</td><td>In force</td><td>27 October 2025</td></tr> <tr><td>Abolition of Section 21</td><td>In force</td><td>27 October 2025</td></tr> <tr><td>Civil penalties up to £40,000</td><td>In force</td><td>1 May 2026</td></tr> <tr><td>Rental bidding ban</td><td>In force</td><td>27 October 2025</td></tr> <tr><td>Awaab's Law (social housing)</td><td>In force</td><td>27 October 2025</td></tr> <tr><td>Private Rented Sector Database</td><td>Not yet in force</td><td>TBC by secondary legislation</td></tr> <tr><td>Decent Homes Standard (PRS)</td><td>Not yet in force</td><td>TBC by secondary legislation</td></tr> <tr><td>Awaab's Law (PRS)</td><td>Not yet in force</td><td>TBC by secondary legislation</td></tr> <tr><td>PRS Ombudsman</td><td>Not yet in force</td><td>TBC by secondary legislation</td></tr> </tbody> </table> <p><em>Last reviewed: May 2026. Sources: <a href="https://www.legislation.gov.uk/ukpga/2025/26/contents" rel="noopener noreferrer" target="_blank">Renters' Rights Act 2025</a>, <a href="https://www.gov.uk/government/publications/guide-to-the-renters-rights-act/guide-to-the-renters-rights-act" rel="noopener noreferrer" target="_blank">GOV.UK Guide to the Renters' Rights Act</a>, <a href="https://www.gov.uk/government/publications/civil-penalties-under-the-renters-rights-act-2025-and-other-housing-legislation/civil-penalties-under-the-renters-rights-act-2025-and-other-housing-legislation" rel="noopener noreferrer" target="_blank">GOV.UK Civil Penalties Guidance</a>.</em></p>