Renters’ Rights Act… Who Really Wins?

Transcript

Hi, I’m Ruban Selvanayagam, co-director at Property Solvers.

Today I want to take a closer look at what’s just become one of the most consequential housing reforms in a generation – the Renters’ Rights Act, which officially became law on 27th October 2025.

It’s being sold as a landmark shift – a long-overdue rebalancing of power in favour of tenants and the final end to what campaigners call the “Wild West” of private renting. Ministers describe it as fair, modern, and compassionate – a way to fix a broken system.

But if you strip away the political messaging and look at the numbers – the funding flows, the enforcement structure, and the market incentives – a different picture emerges.

Because The Renters’ Rights Act Isn’t Just About Tenant Protection… It’s About Financial Containment – managing housing pressures without increasing public spending. In effect, it turns private landlords into the front line of Britain’s housing safety net.

Let’s dive in…

Council finances are under historic pressure.

Since 2010, local-authority budgets have been hit by one of the longest austerity stretches in modern history. The Institute for Fiscal Studies (2024) estimates that core local-government funding in England is still around 23 percent lower in real terms than it was fifteen years ago. Meanwhile, social-care costs have surged by almost half, leaving little room for anything else.

Housing has become the quiet casualty. The National Audit Office (2024) found that councils spent £1.74 billion on temporary accommodation last year – up 62% since 2018.

Ministry of Housing, Communities & Local Government data shows more than 109,000 households are now living in temporary accommodation – the highest since records began. And crucially, over 85 percent of those placements are in private rented homes or B&Bs, not social housing.

That single figure tells you everything: the private rented sector has become the de facto social housing system.

Now, you might think councils could simply build their way out of the problem. But the numbers tell a different story.

In 1980, social housing made up about 31 percent of England’s stock. Today, according to the English Housing Survey 2023-24, it’s down to 16 percent. Each year, we lose roughly 14,000 social-rent homes through Right-to-Buy sales and demolitions (NAO 2024).

Councils still have legal duties under the Homelessness Reduction Act 2017, but not the homes or budgets to meet them.

Now, a few councils are trying to buck the trend. Brighton & Hove, for instance, has approved £50 million to buy 200 homes in what it calls a “Right-to-Buy In Reverse” programme – an attempt to reduce the soaring cost of temporary accommodation that’s swallowing local budgets.

Jacob Taylor, the council’s deputy leader and finance lead, admitted that spending on emergency housing was “Pushing Us Towards Bankruptcy.”

It’s a bold move – but also a rare one. Most authorities don’t have the financial headroom to follow suit. Brighton’s plan highlights the imbalance: a handful of better-resourced councils can buy their way out of the problem, while the rest rely on ever-stricter regulation of private landlords to contain the same pressures.

And that’s hardly surprising. The Local Government Association warned in September 2024 that one in five English councils could run out of money within five years without emergency support.

Several – Birmingham, Nottingham, Woking, Croydon and Thurrock among them – have already issued or threatened Section 114 Notices, the local-government equivalent of bankruptcy.

The Institute for Fiscal Studies (2024) found that local-government funding remains 23–25 percent below 2010 levels in real terms, even as statutory duties like social care and homelessness prevention have expanded.

This is the environment the Renters’ Rights Act steps into.

On paper, it ends Section 21 “no-fault” evictions, introduces a national landlord register, and extends the Decent Homes Standard to private rentals.

Tenants gain new rights – to keep pets, to challenge rent hikes, to complain to a single ombudsman.

Who could argue with that? But what’s missing matters just as much as what’s there.

There’s no dedicated funding for the courts to handle the surge in Section 8 possession cases. There’s no large-scale investment in social housing to rehouse tenants who fall out of the PRS.  And there’s no new money for councils now responsible for policing all these rules.

So how does it work? Through Enforcement Economics.

Trade press is already reporting councils gearing up for “showcase landlord enforcement” once the reforms go live – because fines and fees help fund the very teams that issue them. That’s not a flaw; it’s the business model.

Under the Renters’ Rights Act 2025, this approach becomes hard-wired. Part 6 of the Act  – the Enforcement and Local Authority Powers provisions  – gives councils a statutory duty to enforce private-rented-sector legislation in their area, not just a discretionary power as before.

It builds on the framework first introduced by the Housing and Planning Act 2016, which allowed local authorities to issue civil penalties of up to £30,000 as an alternative to prosecution under the Housing Act 2004.

Barking & Dagenham Council raised £1.3 million in civil penalties last year, covering almost its entire enforcement budget. Liverpool, Newham, and Nottingham, with large licensing schemes, each make more than £2 million a year from licence fees and penalties combined. The Local Government Association now even calls it a “self-funding model.”

Under the Renters’ Rights Act, councils will be granted significantly stronger enforcement powers. Officials can issue Civil Penalties of up to £40,000 for serious or repeated offences – a rise from the current £30,000 cap.

They will also be able to require landlords and agents (and others involved in the letting chain) to produce documents and information, and councils will have new reporting duties requiring them to publish enforcement-activity data.

While the exact details of warrantless entry and fixed-penalty notice levels (such as £7,000) are still subject to secondary regulations, the direction of travel is clear: enforcement becomes more substantial and formalised.

In practice, this transforms local housing enforcement into a quasi-revenue function. Compliance is no longer simply about housing standards – it’s a fiscal mechanism that allows councils to demonstrate results and fund their teams without additional Treasury support.

This is arguably the logic behind the Renters’ Rights Act: shift responsibility for housing standards onto private landlords, let councils fund enforcement through penalties, and keep Treasury spending flat.

No grants. No new money. Just regulation as revenue.

Even the Government’s own paperwork admits the aim. The official impact assessment for the Renters (Reform) Bill 2023 said the measures would: “Reduce pressure on local-authority homelessness services by improving tenancy stability.”

That’s bureaucratic shorthand for saving money. The less tenants move, the less councils spend.

Now that the Act is on the statute book, the real work – and risk – lies in how it’s rolled out.

The Government hasn’t yet set an abolition date for Section 21. Ministers know that without serious court reform, the system would seize up. Every eviction will now flow through the courts, and the courts aren’t ready.

The Ministry of Justice earlier this year reported that the average time from claim to repossession is 44 weeks, up 47 percent since 2019. That’s almost a year.

A landlord with serious rent arrears could wait that long to regain possession while still paying the mortgage, insurance and council tax. That’s not balance; that’s attrition.

Even supporters of the Act admit the rollout will be gradual. The national landlord database, the ombudsman, and the extension of Awaab’s Law to private rentals are all expected to come in phases through the late 2020s and early 2030s. Until those systems exist, court delays will remain the choke point.

That delay matters, because smaller landlords – those owning one to four properties – make up 86 percent of individual landlords, according to the English Private Landlord Survey 2024. They’re individuals with mortgages and pensions, not corporations – and they’re already under pressure.

Buy-to-let mortgage rates sit between 5 and 6 percent (perhaps less for personally owned properties), and add Section 24 tax limits, energy-efficiency upgrades and higher insurance premiums, and stacking up the numbers continues to be a challenge.

Here’s the paradox: Rents Are Rising, Yet Returns Are Falling. The ONS (Q2 2025) shows private rents in England up 8.8 percent year-on-year, but those gains are being eaten away by higher financing and compliance costs.

For many smaller landlords, what was once a steady income stream now feels like a liability. Rightmove’s 2025 data shows rental listings down 41 percent since 2019, while the RICS survey reports the steepest fall in new rental supply since early 2020.

And that’s where the next shift begins. According to British Property Federation and Savills data for Q2 2025 – as reported across industry sources – the build-to-rent pipeline stands at around 290,000 homes nationwide, including roughly 135,000 completed, 49,000 under construction, and over 100,000 in planning. Whilst growth has levelled in recent years, the long-term trajectory remains upward.

Now institutional investors may not love every clause in the Renters’ Rights Act, but they what they value most is predictability.

To be fair, the Act isn’t impact-free for them either. Stricter Decent Homes standards, the ombudsman, and annual reporting requirements all add overhead and procedural risk. The legislation creates a more regulated, rule-bound market – one that rewards scale.

For them, compliance costs and legal frameworks create stability – and act as barriers to entry that push out smaller, less capitalised market players.

To be fair, the Act isn’t painless for institutional investors either. Stricter Decent Homes standards, the ombudsman, and new reporting requirements will add cost and procedural risk.

But those same rules also create predictability – a tightly regulated, rule-bound market that rewards scale. What adds friction for small landlords becomes a competitive moat for large, well-capitalised operators.

When ministers talk about “professionalising” the PRS, what they really mean is concentrating it – regulation that filters the market toward Capital Rich Players.

And Grainger, the UK’s largest listed landlord, all but confirmed it. Its Chief Executive Helen Gordon publicly welcomed the Act, praising the end of no-fault evictions “when coupled with court reform,” and – crucially – the Government’s decision to rule out rent controls, calling the package “Stability for investors.”

Bigger landlords can live with heavier rules because they’re the ones best placed to survive them.

And it’s also worth looking at where this institutional build-out is happening. According to Centre for Cities, 96 percent of build-to-rent stock sits in urban locations, and 84 percent in large cities. In other words, the institutional wave is concentrated in dense, city-centre apartments, not the family-sized homes suburban renters actually need.

So in a decade or two, Britain’s rental market could look less like a network of independent landlords and more like a handful of dominant institutional operators managing standardised assets for yield – consistent, maybe, but at the expense of affordability and diversity.

And as smaller owners exit, the balance shifts toward larger portfolio and institutional landlords – who, by necessity, manage at scale. That means less flexibility and a more impersonal approach to tenants, where decisions are made by compliance teams rather than people who actually know the properties or the families living in them.

Who Loses First..? The Most Vulnerable – tenants on benefits, with pets, or thinner credit histories. Landlords will simply tighten criteria, prioritising lower-risk tenants. But it doesn’t stop there. Risk-aversion and the need for financial protection replace empathy, and the very groups the Act claims to protect find themselves locked out.

The middle market – teachers, nurses, blue collar workers, young families for instance – also looks likely to get squeezed, caught between rising rents and stricter affordability checks. Risk-aversion replaces empathy, and the very groups the Act claims to protect find themselves edged out of an ever-shrinking pool of homes.

If the real goal were tenant security, we’d see parallel reforms:

• Real Investment in Social and Affordable Housing to ease pressure.
• A Properly Funded, Digitised Housing Court so possession cases finish in weeks, not months.
• A Sustainable Council Funding Model that isn’t propped up by fines and fees.

But those require money – and that’s exactly what this Act avoids. It’s cheaper to legislate responsibility onto someone else than to fund it yourself.

So what we’re seeing isn’t housing reform – it’s Political Repositioning. A strategy to manage perception rather than production.

The Government can say it’s standing up for renters, councils can claim new powers, and institutional investors can expand their portfolios – all without the Treasury spending an extra pound.

Everyone walks away looking good – except the people who actually live and operate in the system.

And this is where we have to be honest…

Britain’s housing crisis isn’t caused by a lack of rules. It’s caused by a lack of homes.

You can’t legislate your way out of a supply problem. You can’t make renting fairer by making it harder to rent. And you can’t keep pushing the burden of social policy onto private landlords without consequences.

The Renters’ Rights Act might fix the optics, but it won’t fix the fundamentals. Because ultimately, it’s not about tenants – it’s about budgets. It’s not about fairness – it’s about fiscal control.

The direction of travel is clear: a smaller, more regulated, more corporatised private-rented sector where individual landlords are gradually squeezed out. For councils and the Treasury, that’s tidy – predictable, enforceable, measurable. But for renters, it means less choice, higher prices, and a market serving balance sheets rather than people.

And that’s why, when you ask “Who really wins?” under the Renters’ Rights Act, the answer isn’t renters.

It’s the institutions, the councils balancing their books, and the policymakers claiming progress without paying for it.

The rest of us – SME landlords, tenants, and everyone in between – will be left dealing with the consequences.

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