The Renters’ Rights Act and upward-only rent reviews: what charity landlords and tenants need to know

In this article, Seema Gill, an associate in the charity law and not for profit law team, explains what these developments may mean in practice for charity landlords and tenants.

The big change in the residential sector this year is the Renters’ Rights Act which comes into effect on 1 May 2026.

Whilst the changes will largely be welcomed by tenants, this new legislation will have a significant impact on charity landlords with residential tenants currently occupying under assured shorthold tenancy agreements.

The key areas of change are to the structure of tenancies, tenant protections and ability to recover possession. 

From 1 May 2026, almost all assured shorthold tenancy agreements will automatically become assured tenancies (effectively rolling periodic tenancies); i.e. there will be no fixed term tenancy agreements, with fixed terms drafted into current agreements becoming void. 

Tenants will benefit from increased protections under the new legislation. In relation to rent increases, these will only be permitted once per year with two months’ notice and must be in line with local market rents.

Landlords will no longer be able to require tenants to pay lump sum rent payments in advance, and will instead be limited to requesting a maximum of one month’s worth of rent paid upfront.

A smaller point is that landlords will not be able to ‘unreasonably’ refuse a tenant’s request to keep a pet (contrary to the previous position where a landlord was able to decline a tenant’s request to keep a pet without being required to provide a reason). 

The ability of a landlord to recover possession of a property will become more difficult with the end of ‘no-fault’ evictions (previously dealt with by serving a section 21 notice). Landlords will need to satisfy the new or amended grounds for possession so will not have the option to simply recover possession at the end of the term (without particular reason). Such grounds will include where a landlord wants to recover possession for their own occupation, sell or redevelop the property or where a tenant is in serious rent arrears (at least three months’) or on the grounds of serious antisocial or criminal behaviour by the tenant.  

There are notable fines for non-compliance by landlords – up to £7,000 for initial/lesser breaches and up to £40,000 for serious or repeat breaches. Charity landlords with residential tenants occupying under assured shorthold tenancies should therefore ensure they are familiar with the practical impact of the new legislation, and seek advice where appropriate.

As the new regime offers less flexibility for charity landlords, many have taken the decision to sell residential investment properties as the Renters’ Rights Act comes into force. Where landlords are content with the new regime, it is important that they liaise with any managing agents (and possibly solicitors) to ensure that everything is ready for 1 May. There may for example be scope to increase the rent on expired assured shorthold tenancies, bearing in mind it will need to be more gradual in the future.