"The Renters’ Rights Bill isn’t just another regulatory update. For lenders, it’s an opportunity to move beyond transactional lending and become true partners in helping landlords adapt in a new era of compliance and accountability"
- Hamza Behzad - Finova
The Renters’ Rights Bill is set to reshape the private rental sector. Now introduced as law, the legislation will give tenants greater security, tighten property standards, and increase regulatory demands on landlords. But the changes won’t just affect renters and landlords - lenders are set to feel the impact too.
As landlords adapt to rolling tenancies and stricter compliance, lenders must rethink how they support their landlord clients. With further housing and tax measures potentially on the agenda in the upcoming Budget, such as stamp duty and property tax reforms, this will mean adjusting products, offering practical guidance, and finding new ways to help landlords manage both risk and opportunity in a changing market.
The end of fixed-term tenancies
One of the biggest shifts will be the end of fixed-term assured shorthold tenancies. All tenancies will become rolling once the legislation takes effect, meaning tenants can exit a contract with just two months’ notice. For landlords who are used to the stable income of a 12-month lease, the changes will introduce a new set of risks. More frequent tenant turnover could disrupt cash flows and, in some cases, result in quite a few empty properties.
Lenders must therefore think creatively, perhaps by offering greater flexibility in repayment structures or short-term payment holidays when landlords experience rental gaps. Some may even look to develop new tools that help landlords stress-test portfolios and plan for fluctuating income patterns. It’s not just about protecting the lender’s book; it’s about giving landlords the breathing room to manage their portfolios confidently.
No more ‘no-fault’ evictions
The Bill also scraps Section 21 ‘no-fault’ evictions. To say this move will fundamentally change how landlords manage their properties is an understatement. From now on, landlords will need a valid legal reason to regain possession, such as selling, moving back in, or dealing with rent arrears. This will make evictions slower and potentially more expensive.
The result? More uncertainty and potentially longer legal timelines, none of which is good news for a landlord’s bottom line. For lenders, this means rethinking risk. Offering legal support or rent guarantee insurance could help landlords feel more secure and keep mortgage payments on track even when tenant issues arise. In any event, specialist products can equip landlords with the right tools and the necessary confidence to navigate a complex market environment.
Rules on rent increases and fair letting practices
Under the Bill, rent increases will be capped at once per year, with at least two months’ notice required. The government is also banning ‘rental bidding’, where tenants are invited to outbid one another, and outlawing discrimination against those receiving benefits or with children, ensuring fairer access to housing for a wider range of renters.
For landlords, this cap tightens income flexibility. For lenders, it means income forecasts may need to be more conservative. But it also opens the door for innovation. Longer-term fixed rates or tailored financial products can help landlords maintain healthy returns under the new framework.
Raising the bar on property standards
Perhaps the Bill’s most pressing demand is the extension of the Decent Homes Standard to the private rented sector. In addition, ‘Awaab’s Law’ will require landlords to fix serious hazards like damp and mould within stricter timeframes of up to 14 days. Meeting these new obligations could be expensive, especially for older housing stock, given that 38% of UK homes were built before 1946 and may require significant investment to meet the new standards.
Lenders can play a crucial role here by offering targeted products such as energy-efficiency loans and green improvement financing. Helping landlords meet these standards protects property value, keeps tenants safe and reduces the risk of enforcement action.
Opportunity in the shake-up
The market is likely to respond to these changes in different ways. Smaller landlords may decide the effort isn’t worth it and exit the market, freeing up housing stock for first-time buyers or larger investors. Others - particularly professional landlords - will double down, improving standards and expanding portfolios. Lenders will need to support both journeys, offering exit solutions for those selling up and bespoke financing for those who are ready to grow.
The Renters’ Rights Bill isn’t just another regulatory update. For lenders, it’s an opportunity to move beyond transactional lending and become true partners in helping landlords adapt in a new era of compliance and accountability.
