Ahead of the Renters’ Rights Act coming into force this Friday, Kent and London law firm Thackray Williams says it has had a wave of last-minute instructions from landlords looking to exit the market as their investment portfolios become unviable in the wake of the act and other changes they face.
It says its litigation team has been instructed to seek possession for landlords who want to sell their entire buy-to-let portfolios. It has also seen an increase in last-minute Section 21 ‘no fault’ eviction notices for flats and houses.
“Our clients are all saying the same thing: the new liabilities and reduced flexibility being introduced by The Renters’ Rights Act 2025 from 1 May is the final straw in making their property investments no longer commercially or practically viable, particularly in a challenging economic climate and with other changes also in the pipeline,” said Mustafa Sidki, contentious construction litigation partner.
Rethinking investment strategies
The changes to the act will make it more challenging for landlords to regain possession of their rental property, he explained. “This reduced flexibility is causing many landlords to rethink their investment strategies, especially as other factors mean they are facing reduced – and even negative cashflow – while also facing increased admin and responsibilities.”
“We’re anticipating increased instructions for our conveyancing team as these landlords put their properties on the market as soon as they are able, which in turn could negatively impact property prices, particularly in areas that have traditionally had a strong rental sector,” said conveyancing partner Claire Josef.
Tax, mortgage and EPC pressures
Sidki said that tax changes, mortgage rate rises and new EPC responsibilities were also driving landlords out. “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 income from property by Rachel Reeves in her November 2025 budget,” he said.
“Additionally, fixed-rate buy-to-let mortgages of 1-2% are coming to an end this year, with new re-finance rates of 5-6% being offered,” he continues, “while the costs of maintaining properties, insurance premiums and local authority licensing fees have all risen this year due to inflation.
“On top of this, landlords now have additional admin with the requirement of quarterly income returns introduced under Making Tax Digital at the beginning of 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 rushing to beat the legislation to be able to divest their portfolios.”
