Welcome to our monthly property newsletter.

This month we look at the ongoing impact of the Renters’ Rights Act, a welcome update on SDLT concerns for periodic tenancies, and whether holiday lets remain an attractive option for landlords considering alternatives to traditional buy-to-let.

If you would like to discuss any of the topics covered, please get in touch.

Renters’ Rights Act: what landlords need to know

The Renters’ Rights Act represents one of the biggest changes to the private rented sector in decades.

While the reforms are designed to strengthen tenant protections, they also create new considerations for landlords around cashflow, compliance and risk management.

One of the most significant changes is the abolition of Section 21 “no fault” evictions. Landlords must now rely on specific legal grounds under Section 8 to regain possession of a property, such as rent arrears or an intention to sell.

At the same time, fixed-term assured shorthold tenancies are being replaced by rolling periodic tenancies. These arrangements continue indefinitely unless ended by the tenant or through a valid legal process.

For landlords, this may reduce certainty around future income and limit flexibility when managing property portfolios.

The reforms also introduce tighter controls around rent increases, generally restricting increases to once per year and requiring formal notice procedures to be followed.

Tenants will also gain additional rights, including the ability to request permission for pets and challenge rent increases.

Taken together, these changes are likely to result in:

• Longer tenancy periods.
• More regulated rent review processes.
• Potentially slower and more costly possession proceedings.
• Increased exposure to income disruption where tenants fall into arrears or disputes arise.

Why insurance is becoming more important

As the regulatory environment changes, insurance is becoming an increasingly important part of a landlord’s risk management strategy.

Policies that may once have been considered optional are becoming more relevant, including:

• Legal expenses cover, which can help fund possession proceedings that may become more complex and time consuming.
• Rent guarantee insurance, which can provide protection where tenants default and delays in regaining possession extend periods without rental income.
• Liability cover, particularly as property standards become more heavily scrutinised and tenants become increasingly aware of their rights.

What this means for you

The Renters’ Rights Act increases the importance of planning ahead.

We recommend that landlords:

• Review cashflow forecasts to reflect potential delays in regaining possession.
• Reassess risk exposure across property portfolios, particularly where borrowing levels are high.
• Review insurance arrangements, including rent protection and legal expenses cover.
• Ensure tenancy documentation and compliance processes are robust, as evidencing legal grounds for possession will become increasingly important.

SDLT and the Renters’ Rights Act: an update

We previously reported concerns that the Renters’ Rights Act could unintentionally create SDLT liabilities for certain long-running residential tenancies.

Under the Act, existing assured shorthold tenancies and new residential occupational leases in England convert to periodic tenancies.

From an SDLT perspective, this raised concerns because some leases, particularly older tenancies involving higher-value properties, could become liable to SDLT.

For SDLT purposes, a periodic tenancy is treated as a one-year lease in year one, a two-year lease in year two, and so on, with a fresh SDLT calculation required at the end of each year.

Importantly, there is only ever a single lease, meaning the net present value (NPV) of rent accumulates over time.

Without legislative change, once the cumulative NPV exceeded £125,000, SDLT at 1% would become payable on the excess for a UK resident individual. Higher rates could apply to non-residents.

In a welcome development, on 22 April 2026 Dan Tomlinson, the Exchequer Secretary to the Treasury, announced that the Government intends to legislate through Finance Bill 2026-27 so that residential leases treated as assured tenancies under the Housing Act 1988, as amended by the Renters’ Rights Act, will not give rise to an SDLT charge on the rent element.

The Government has confirmed that further details will be released at or before this year’s Budget.

The legislation will apply retrospectively from 1 May 2026, being the date existing tenancies became section 4A assured tenancies under the Renters’ Rights Act.

HMRC has confirmed that it will not collect SDLT on the rent element of an assured tenancy from that date until the legislation takes effect.

What this means for you

This announcement removes a significant area of uncertainty for many landlords and tenants.

While we await the detailed legislation, the Government’s intention is clear and should prevent SDLT charges arising purely because tenancies have converted to periodic arrangements under the Renters’ Rights Act.

Will holiday lets remain popular after the Renters’ Rights Act?

As regulation increases within the private rented sector, some landlords are reconsidering whether holiday lets offer a more attractive alternative to traditional buy-to-let investments.

The appeal is understandable.

The end of “no fault” evictions and the introduction of more secure tenancies has reduced flexibility for landlords, prompting some to explore short-term letting arrangements that offer greater control over occupancy and pricing.

However, switching to holiday lets is rarely as straightforward as it first appears.

While gross annual income can range from around £10,000 to £30,000, the costs of operating a holiday let can be significant. Cleaning, maintenance, booking platform fees and management costs can absorb a substantial proportion of income, in some cases up to half.

Unlike traditional residential lettings, landlords also remain responsible for all ongoing property costs.

Seasonality presents another challenge.

In many locations, the majority of income is generated during peak holiday periods, leaving extended periods where occupancy and revenue can be significantly lower.

Landlords should also be aware that regulation in the holiday let sector continues to evolve.

The Government has made it clear that landlords cannot evict tenants simply to convert properties into holiday lets. Proposed registration schemes and wider tax changes are also likely to influence the long-term attractiveness of the sector.

What this means for you

Holiday lets may offer greater flexibility, but they are not necessarily a simple solution to the challenges facing traditional landlords.

Before making any changes, landlords should carefully assess likely occupancy levels, operating costs, cashflow requirements and the wider regulatory landscape to ensure the numbers stack up over the long term.