The Renters’ Rights Bill – which will do away with Assured Shorthold Tenancy (AST) – is probably the biggest regulatory change in the residential rental market in England and Wales of the past 30 years.

Its political importance is reflected in the speed at which it has been fast-tracked through parliament. So it’s going to happen. It’s really now a case of how quickly it receives Royal Assent. With more than 200 amendments proposed, we will have to wait and see how many (limited) concessions will be made to landlords in the next stages of its progress.

But what does it mean for the prime rental markets?

Who will be affected?

The Bill is primarily designed to deal with changing demands in the mainstream private rented sector, but it will have implications for the prime rental market also. A lot of prime housing stock will be directly affected, and even that which is not will feel the impact of changing practices and expectations in the sector.

What are the main measures in the Renters’ Rights Bill?

Though not an exhaustive list, the main features of the bill can best be summarised as follows:

1. It will bring an end to AST. For the vast bulk of the private rented sector, that means landlords will lose the ability to recover possession on two months’ notice at the end of a tenancy. It also ends the need for tenancy renewals in most cases.
2. While it will give new and existing tenants greater security of tenure, landlords will still be able to recover possession of a property where there is a genuine intention to sell it, or where they can prove that either they themselves, or their close family members, intend to occupy it.
3. But, notice periods that need to be given to tenants will be extended in some circumstances, even where there is a legitimate reason to bring the tenancy to an end.
4. It will restrict bidding wars by making it impossible for a landlord to accept a rent higher than the asking rent.
5. It will formalise the procedure for rent review through service of a Section 13 notice, giving the tenant the right to refer the matter to tribunal. In those circumstances, the rental increases will only become chargeable once the matter has been settled.
6. It will introduce a Decent Homes Standard to the private rented sector, on top of existing regulatory requirements.
7. It will bring in a Private Rented Sector Landlord Ombudsman to deal with tenants’ complaints.

What does this mean in practice?

It still isn’t clear how all of this will play out, but there are four areas where we expect to see things change:

1. We expect to see an increase in asking rents in order to give landlords the headroom to allow for an appropriate degree of competition between tenants. Additionally, the move away from rent in advance beyond one month may lead to more thorough credit-checking of tenants.
2. There will be a much more scientific approach to rent review. We expect agents to provide more evidence to support any rent increases in order to minimise the risk of being referred to tribunal, which can result in delay and disruption. As a result, open market evidence will be at a premium and rental indices will be pored over with greater scrutiny (especially during periods of rental volatility, such as those seen over the past five years).
3. Regular property inspections will become even more important to ensure tenants are complying with the terms of their tenancy agreement and that any issues are dealt with swiftly. This is ultimately to protect the value of the landlord’s investment.
4. A rigorous approach will need to be taken in proving grounds for recovery of possession of a property, given the implications of getting it wrong – not least, the time wasted due to increased notice periods.

_{This information reflects the latest draft Renters’ Rights Bill as at 16 April 2025. The Bill remains subject to further amendment as it progresses through the Parliamentary approval process in the lead-up to it receiving Royal Assent and becoming law, which per the latest Government estimates, is expected to be in summer 2025. Your local Savills office is able to assist you with the latest information.}

How much flexibility will landlords lose?

The latest English Housing Survey tells us that the average period of occupation for someone in the private rented sector was 4.31 years in the year to April 2023. London tenants typically stay for even shorter periods than this. Moreover, 21% of tenants had been in occupation of their current home for under two years.

And, with 63% of tenants ending their tenancy voluntarily because of a desire to move, and a further 10% moving by mutual consent, there should still be sufficient movement in the private rented sector to ensure that open market rents can be monitored with reasonable accuracy. Furthermore, in many cases, this will provide an opportunity to furnish new tenants with more up-to-date tenancy terms.

Should I stay or should I go now?

It is inevitable that these changes, together with the prospect of increased minimum energy efficiency standards, will make some landlords more cautious and cause some to rejig their portfolio. However, at the same time, some of the other financial pressures on landlords will ease as interest rates fall.

There is already increasing evidence that this is fuelling a shift to larger, wealthier landlords. It is likely that it will also entrench an existing undersupply of rental property.

This is likely to put ongoing upward pressure on rents over the medium term. And, that in turn is likely to underpin the credentials of an investment, backed by the security of bricks and mortar.

And so, even if investment in prime property becomes more weighted towards a store of wealth, rather than a route to it, there will still be plenty of reasons for more affluent investors to operate at this end of the market.

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_{Read the articles within Prime UK Residential – Spring/Summer 2025 below}