On May 1st 2026, Section 21 ‘no fault’ evictions were abolished in the UK under the Renters Rights Act 2025. This is the most significant reform the private rental sector has seen in over 30 years, since the Housing Act 1988.
The abolition of Section 21 is widely understood as a fundamental change to what happens at the end of a tenancy, but the less-discussed consequence of the implementation of the Renters' Rights Act is what it changed about the beginning.
There is an assumption that the Act primarily affects landlords’ exit options, but another real impact is felt at the point of referencing, not eviction. When eviction or repossession becomes more difficult, landlords may become more selective when it comes to choosing a tenant, as a bad choice could be costly.
However, this can have huge consequences for high-risk tenants who have less stable income streams, such as self-employed workers or benefit recipients. In 2024, the UK private rented sector hit new records for enquiries with 17 bids for each advertised rental property. This growing imbalance between housing demand and rental availability, combined with the elimination of Section 21, is making it increasingly more difficult for high-risk tenants to secure a property.
Mark Dawson, managing director, AST Assistance, said: “The abolition of Section 21 has been designed to provide greater security for tenants, as landlords can no longer issue ‘no fault’ evictions.
However, removing landlords' exit route isn’t as much of a benefit to tenants as it seems and it’s actually making it increasingly harder for tenants to secure rental properties. This is especially the case for vulnerable or ‘high-risk’ tenants with non-typical income streams.”
More protection at the end means more barriers at the start
Prior to the end of Section 21, serving an eviction notice enabled landlords to reclaim control of a property efficiently without court-proven fault. This gave landlords a relatively reliable exit route from difficult tenancies, usually involving a standard court process and two months' notice.
Furthermore, it allowed them to rent to higher-risk tenants, knowing that if the worst happened, recovery was achievable within a manageable timeframe. However, Section 21 wasn’t primarily used as an ‘abuse’ tool to evict tenants without a reason. In 2023, only 9% of tenants who moved out of rental properties said they were asked to leave.
What changes under the Act
For the majority of landlords, the removal of Section 21 is not deemed a positive step. It removes the fastest and easiest route to regain possession of a property, as it has resulted in the following changes:
● All tenancies became rolling from 1 May 2026, meaning that fixed-term assured shorthold tenancies are no longer used.
● Possession now requires a Section 8 notice displaying specific statutory grounds for ending the tenancy, with a mandatory court hearing for most cases.
● Accelerated possession procedures, used for Section 21 claims, are removed, increasing court volume and average timelines.
● Landlords wishing to sell or reclaim properties for personal use must give four months’ notice and meet new evidentiary requirements.
● Potential increases in the cost of a failed tenancy, due to arrears, legal fees, void periods and property damage.
The referencing response
As the route to possession becomes harder and slower, landlords and letting agents may become stricter and more selective when choosing tenants to avoid high-risk tenancies. To cover their backs, landlords may now require tenants to earn more relative rent. Where tenants needed to be able to afford 2.5 times the yearly rent of a property, it may now be imposed that they have to afford 3 to 3.5 times the rent.
Furthermore, landlords may favour tenants with stable salaries and prefer PAYE employment over self-employment, zero-hours contracts or benefits income. Referencing checks are also becoming stricter and place closer attention to County Court Judgements (CCJs), missed payments, and gaps in rental history. Therefore, the use of guarantors and guarantor referencing itself is becoming increasingly more rigorous.
Who gets filtered out - and why it matters
The tightening of referencing criteria may increase exclusion for vulnerable or marginalised renters, those who were already the least well-served by the private rented sector.
The self-employed
Tenants who are self-employed have a more variable and harder-to-verify income than PAYE payslips. Even those whose income has grown will be penalised as standard income multiples are often calculated on the lower of the past two years’ earnings. In some cases, landlords or letting agents use automated referencing platforms that can disadvantage non-standard income groups as they automatically apply pass or fail scoring.
Benefit recipients
Unfortunately, for benefit recipients, Local Housing Allowance rates remain below market rents across the majority of England. This means that these renters will have to use their basic living money in order to afford rent and remain housed, making them a high-risk choice for landlords. Landlords’ reluctance to accept Universal Credit or Housing Benefit is already well known, and now there is further financial rationale.
Patchy credit histories
Among younger renters, care leavers and those who experienced financial hardship during the pandemic, CCJs and Individual Voluntary Agreements (IVAs) are becoming increasingly more common. Prior to the removal of Section 21, credit checks were one screening factor among several others, but now they are considered immediate reasons to reject applicants.
The Legal Limits of Referencing Under the Equality Act 2010, landlords can set rules for tenants when referencing, such as income requirements and guarantors, but these rules must not unfairly disadvantage certain groups. Financial thresholds that disproportionately exclude people based on certain characteristics, including disability, race or age, may be challenged.
The supply side makes it worse
The shrinking supply of private rental properties, accompanied by a more selective landlord pool, creates an increasing access problem for vulnerable renters.
Landlords exiting the market
More landlords are now starting to exit the market, as being a private landlord is becoming less financially attractive. Higher mortgage rates, loss of mortgage interest tax relief and increased regulation have eroded the financial case for small-scale residential letting.
As some landlords anticipated the end of Section 21, they decided to stop renting them out or sell their properties in advance to avoid the legal changes. In fact, landlord possession claims fell 11% year on year in the final quarter of 2025.
Demand pressure
The availability of rental property is becoming extremely limited compared to the demand, making it increasingly harder to secure a rental property in the UK. Alongside this unprecedented demand, the cost of private rental properties rose to 8.6% in England and 9.7% in London in the 12 months to June 2024. Therefore, there is no sign that the housing shortage will improve soon, especially as new build numbers remain below government targets.
The social housing gap
The private rented sector is now increasingly housing those who cannot access social housing, either due to waiting list length, eligibility or stock shortfalls. In fact, around 4.6 million households were
private renters in 2022/23; this is more than twice as many as in earlier decades. A more selective private rented sector can displace tenants, and as they are not offered social housing, it leaves them with no viable alternative.
Section 8 Is Not a Like-for-Like Replacement. The expanded Section 8 grounds are now considered the solution to the repeal of Section 21. However, they are slower, harder to use, and more expensive, which is why they are changing landlord behaviour at the start of tenancies, not just the end.
How Section 8 Works Post-Act: Following the implementation of the Renters Right Act, landlords must use Section 8 of the Housing Act 1988 to recover possession of their properties. This requires landlords to give a specific reason for evicting a tenant from a defined list.
Most of these grounds require a full court hearing where evidence is presented, as the judge has discretion. In this context, mandatory grounds require a judge to provide possession if proven, whilst discretionary grounds allow the judge to decide if an eviction is reasonable.
Missed or late rent payments are the most reliable mandatory ground for eviction, but the tenant must owe a minimum of two months' rent from the date of notice and the date of hearing. As court cases are long-winded, a tenant could stop paying rent for several months before the eviction actually takes place. A landlord may effectively lose four to six months' rent before legally getting their property back.
Court Capacity and Timeline Reality: In 2025, the median claim-to-repossession timeline was 27.4 weeks, or just over 6 months. Prior to the abolition of Section 21, accelerated procedures have now been removed, so the majority of cases must go through full court hearings, increasing court volume.
As more landlords are competing for limited court time, hearings and enforcement take longer, resulting in financial exposure. Landlords will still have to pay mortgage, insurance, service charges and maintenance costs, whilst receiving little or no rent.
The true cost of a failed tenancy
It can cost thousands of pounds in legal fees for landlords to dispute an eviction case, as court applications, solicitors and enforcement costs quickly add up. Furthermore, even if the landlord wins their case, they may never recover the unpaid rent, as if the tenant has little income, debt, or assets, a court judgment is practically unenforceable.
Beyond rent arrears, there are often additional losses, including property damage, void period after recovery and re-letting fees. For a leveraged landlord, who has a mortgage on the property, a single failed tenancy can wipe out years of rental income on the property.
Referencing as risk management - and its limits
What thorough referencing involves
A thorough referencing process involves checking that the tenant can pay rent reliably, maintain the tenancy and meet legal requirements. To establish that the process is comprehensive, landlords should carry out the following checks:
● Credit checks: This looks for financial warning signs, such as CCJs, defaults, bankruptcy history, and missed payments.
● Income verification: This proves that the applicant can afford rent by checking payslips, tax returns, and SA302s for self-employed applicants.
● Rental history: Checks whether a person has been a stable tenant by looking at previous landlord references.
● Right to Rent: This is a legal requirement under the Immigration Act 2014 that checks that tenants have a legal right to rent property in the UK.
● Affordability assessment: Checks that a tenant can afford an income-to-rent ratio, which should be around 3-3.5 times the rent.
The case for professional referencing services
Manual referencing is typically inconsistent and difficult to evidence if challenged. By using professional referencing services, landlords can reduce legal and compliance risks by providing documented audit trails that can support a landlord's position if a decision is disputed. Consistent and transparent criteria applied equally to all applicants provide the strongest defence against discrimination allegations.
Conclusion
Removing Section 21 does not eliminate the risk of a difficult tenancy, but what it does do is make that risk more permanent and more expensive. Social housing doesn’t have the capacity to absorb those who are displaced by rental housing. Therefore, without deliberate intervention, the most vulnerable renters will be the net losers of legislation designed to protect them.
For landlords, robust referencing is now an essential risk management tool that should be structured, documented, legally compliant, and applied consistently. But for policymakers and tenant advocates, tenant protection legislation that increases the cost and permanence of a difficult tenancy creates incentives for the very selectivity it is trying to prevent.
Mark concludes: “Stronger tenant protections do not remove risk from the system; instead, they shift where that risk is managed. In practice, that often means tougher screening when applying for a rental property and fewer opportunities to secure a property for applicants who are perceived ‘high-risk’ and fall outside conventional criteria.”
