The UK’s private rental sector is on the cusp of a major legislative overhaul. The Renters’ Rights Bill is expected to come into force in England in early 2026 and will abolish Section 21 notices, commonly referred to as “no-fault evictions.” As litigation partner Sarah Oakley explains in this article, these changes will be significant for UK companies that own, manage or invest in rental properties, particularly those with large portfolios or operational exposure to tenant turnover.
The abolition of Section 21 is part of a broader government reform agenda aimed at improving tenant security. For corporate landlords, property managers and institutional investors in the UK, preparation will be essential.
What is Section 21 and why is it being abolished?
Section 21 of the Housing Act 1988 currently allows landlords to evict tenants without providing a reason, provided the correct notice is served. For companies managing residential assets, this has offered a streamlined route to regain possession and is often used to facilitate refurbishments, disposals or strategic reconfigurations.
The Renters’ Rights Bill will remove this mechanism entirely. Once enacted, landlords – including corporate entities – will instead need to rely on Section 8 of the Housing Act to initiate possession proceedings. Section 8 requires landlords to demonstrate specific legal grounds for eviction; examples might include rent arrears, breach of tenancy terms or property damage. The Bill will however also introduce new grounds for possession including the landlord having the intention of selling the property.
In short, landlords will now not be allowed to evict tenants (on new and existing tenancies) without a specific and valid reason.
What does the abolition of Section 21 mean for commercial landlords?
The shift to Section 8 as the exclusive route for possession will require companies to adjust their internal procedures and legal strategies. Unlike Section 21, which allowed for relatively swift repossession, Section 8 proceedings are more complex and often require court involvement. This has the potential to introduce greater uncertainty and potential delays if disputes arise or tenants contest the grounds for eviction.
The Bill aims to provide landlords with more straightforward regulation and clearer grounds for possession, and does aim to strengthen and streamline Section 8 grounds to ensure landlords retain the ability to recover properties in legitimate circumstances. For example, persistent rent arrears will remain a mandatory ground for possession, and new provisions will be added to support landlords seeking to sell or repurpose their assets.
Transition to periodic tenancies
Another major reform is the abolition of fixed-term tenancies. Under the new framework, all tenancies, existing and new, will convert to periodic tenancies, typically operating on a rolling monthly basis. This change is intended to provide tenants with greater flexibility and reduce the risk of sudden displacement.
For property-owning companies, this reform will require a reassessment of tenancy structures, rent review mechanisms and long-term occupancy strategies. The absence of fixed terms may also affect financial modelling, particularly for portfolios reliant on predictable turnover or short-term lets. Companies will need to consider how periodic tenancies impact asset performance.
It is important to note the government has confirmed that the new rules will apply to all tenancies simultaneously, rather than being phased in gradually. This means that companies must ensure their entire portfolio is compliant from the outset.
Regulatory and compliance considerations
In addition to changes in possession procedures, the Renters’ Rights Bill will introduce a national landlord register, requiring all landlords including corporate entities to register their properties. Each property will be assigned a unique reference number and landlords will be required to keep their records up to date. This measure is designed to improve transparency and enforcement across the sector.
The Bill will also extend the Decent Homes Standard to private rentals, raising expectations around conditions of properties. Companies may need to invest in upgrades or compliance systems to meet these new standards, particularly if managing older or lower-grade stock.
Operational and legal risks
The abolition of Section 21 is expected to result in a rise in contested possession claims, especially during the initial transition period. Companies will need to ensure that any possession proceedings are fully compliant with Section 8 requirements.
Failure to comply could result in delays, reputational damage or financial loss. Key steps include:
- Reviewing tenancy agreements across the portfolio
- Updating internal notice procedures
- Training property managers on the new legal framework
- Ensuring documentation is sufficient to support possession claims
Property managers should also consider the impact on dispute resolution processes, particularly in light of concerns about delays in the court system. Possession claims may take longer to resolve, increasing risk exposure for landlords.
Strategic planning ahead of the abolition of Section 21
With the Renters’ Rights Bill expected to take effect in early 2026, companies have a limited window to prepare. Legal teams, asset managers and compliance officers should begin assessing their exposure and updating policies to reflect the new legal environment.
Landlords need to:
- Familiarise themselves with the new and existing grounds for possession under Section 8
- Review existing tenancy agreements to ensure they comply with the new regulations
- Consider the implications of the abolition of fixed-term tenancies
Section 21 notices remain valid until the Renters’ Reform Bill becomes law, therefore we would urge you to seek professional advice to understand the full implications of the new legislation and how to prepare for it.
