There has been an increase in last minute instructions from homeowners looking to sell. Tenant Rights Act 2025 It is coming into effect from this Friday.
thackeray williamsThe company, which operates in London and Kent, said its litigation team has seen an increase in instructions from landlords aimed at securing possession of properties before sale, as well as an increase in Section 21 notices served on individual tenancies.
“All of our clients are saying the same thing: the new liabilities and reduced flexibilities being introduced by the Tenants’ Rights Act 2025 from 1 May are the final straw in making their property investments no longer commercially or practically viable, particularly in a challenging economic environment and with other changes in the pipeline,” says Mustafa Siddiqui, Contentious Construction Litigation partner.
Tenant Rights Act 2025 Wide-ranging reforms have been introduced in the private rented sector, including the end of section 21 evictions, new occupation grounds, a change from fixed-term tenancies to periodic agreements, limits on rent increases, anti-discrimination rules and the right for tenants to request permission to keep pets.
Siddiqui commented: “The changes being introduced by the Tenant Rights Act this Friday mean it will take longer and cost more for landlords to regain possession of a rental property.
“This reduced flexibility is causing many landlords to rethink their investment strategies, especially as other factors mean they are facing reduced – and even negative cash flow – as well as increased administrative and responsibilities.”
“We are expecting increased instructions for our conveyancing team as these landlords put their properties on the market sooner, which can result in a negative impact on property prices, particularly in areas that have traditionally had a strong rental sector,” says conveyancing partner Claire Joseph.
“Many portfolios are no longer commercially viable due to landlords losing the ability to deduct full mortgage interest from rental income (under section 24 of the Finance Act) and the introduction of an additional 2% tax on property income by Rachel Reeves in her November 2025 Budget,” Mustafa elaborated.
“Additionally, buy-to-let mortgages with fixed rates of 1-2% are coming to an end this year, with new refinance rates of 5-6% being offered,” he adds, “while the cost of maintaining properties, insurance premiums and local authority license fees have all increased this year due to inflation.
“For flat owners, service charges are also rising too much due to inflation. While service charges may be challenged, freeholders are saying that their own costs are rising and thus the increase would be considered justified.
“On top of this, landlords now have additional admin with the quarterly income return requirement introduced under Making Tax Digital earlier this month.
“With many landlords facing costly upgrades to bring their properties up to EPC C by 2030 under the Decent Homes Standard 2026, many of them are saying the finances simply no longer add up and are racing to break the law to be able to divest their portfolios.”
There are two categories of ASTs that will not become PATs on 1 May 2026; First where there is a valid pending Section 21 notice or second where there is a valid pending Section 8 notice to initiate eviction proceedings if the tenant is in breach of the tenancy.
Paragraphs 3 and 4 of Schedule 6 to the Tenant Rights Act state that a valid section 21 notice given before 1 May 2026 will remain valid, and the tenancy will continue to be AST, until the landlord regains possession and the tenancy ends, the notice expires or the judge decides that the notice is invalid.
“Although many landlords have planned for this in advance, we are seeing a large number of last minute applications to serve Section 21 notices by Thursday from landlords who have decided that property investment is now too challenging to be viable,” Sidki said.