Six ways the Renters Rights Act will change renting: Part 5, Rent Issues

This is the fifth in my series about the likely implications of and outcomes from the introduction of the Renters Rights Act 2025.

There is quite a bit in the new legislation about rent, and the ever-increasing rent levels have been a concern for this government.

Why rent levels are of concern

For years, decades even, tenants have been intimidated from challenging rent increases, due to the overt or implied threat of a section 21 eviction. So, in many areas, rents have been increasing at above the rate of inflation for a long time.

Partly as a result of this, housing is more expensive in the UK than in almost any comparable country.  It also absorbs a larger share of household spending than in any other OECD country apart from Finland.

But the new Act is designed to change this.

Rental bidding

There has also been the problem, caused mainly by the shortage of decent accommodation in areas where it is needed, of ‘rental bidding’. Or tenants pushing up rents by offering higher and higher rents in an attempt to secure a home.

The government hope to stop this by:

• Requiring all property adverts to state a ‘proposed rent’ which landlords cannot charge more than, and
• Giving Local Authorities the power to fine landlords who either fail to cite a proposed rent, or who allow tenants to bid above this.

Then, there are new laws against:

Rent in advance

This has been another reason why renting property has become so expensive for many tenants.

Landlords are requiring increasingly large sums paid in advance, particularly where tenants have a less than satisfactory credit record.

So now if landlords accept any rent in advance of the tenancy agreement being signed, this is a breach for which they can be fined up to £5,000 per offence by ‘local weights and measures authorities’.  In other words, Trading Standards.

Increasing rent

Up until 1 May, landlords could increase rent by

• Agreement – normally by the tenant signing a new tenancy agreement with the increased rent, at ‘renewal’
• A rent review clause in the tenancy agreement, and
• By the statutory notice procedure set out in section 13 of the Housing Act 1988.

However, now landlords can ONLY increase rent via the statutory notice procedure.

This does not mean that rent levels can’t be agreed with tenants.  But new rents can only be implemented if the section 13 notice (form 4A) has been served first.

Any rent review clauses in tenancy agreements are now unenforceable.

Challenging rent increases

The thing about using the section 13 notice procedure is that tenants can challenge the proposed rent to the First Tier Tribunal on the basis that it is not a ‘market rent’.

The Tribunal will only be able to review the rent down, not up, and the new rent will be payable from the date of the Tribunal’s determination.  Or up to two months later if the Tribunal considers it would cause serious hardship to tenants.  So the rent increase will no longer take effect from the date in the notice.

Many landlords are seriously annoyed about this.  It will delay rent increases, whether or not the challenge is justified.  The Tribunals are overstretched and are likely to be more so if more tenants decide to challenge rent increases.  In which case, the delays could become unacceptably long.

The government has reserved to itself the power to change this if the delays become too serious.  We shall have to wait and see whether this happens.

The effect of these new rules

These new rules will undoubtedly make life easier for many tenants. Up until 1 May 2026, many were having to pay not only a deposit of up to five times the weekly rent, but also six months’ (or sometimes more) rent in advance.  Not to mention quite high rent increases every six months or so (in some cases).

However, the new rules will also create a problem for many tenants. In particular, tenants with a poor credit record.  These will likely struggle to find anywhere to live.  As landlords will undoubtedly become more picky about the tenants that they accept.

So far as the rent levels themselves are concerned, the government hopes that these new rules will slow down the rate of increase.  Making tenancies more affordable over time.

To prevent a downward drift in rent levels, landlords will need to ensure that rents are increased regularly.  Small annual rent increases are better anyway, as they are more affordable for tenants and less likely to cause problems.

However, rent levels are ultimately driven by the market.  At present, good properties are in short supply in many areas.

So rents are likely to remain high, and those with poor credit records are likely to struggle to find a suitable property.  Unless and until the government is able to honour its promise to build more social and other housing.  In particular, for low-income tenants.

Tomorrow I want to talk about the forthcoming new Database and Ombudsman services.