"Reform on this scale rarely comes without challenges, but it also creates a chance for the prime lettings sector to reset expectations"
- Yasmin Ulhaq - Glenfield Property Management
The controversial Renter’s Rights Bill legislation, which is set to completely overhaul the private rented sector, has now cleared its final debate and is on the brink of becoming law. When passed, it will mark the most significant reform of the private rented sector in decades, reshaping the legal framework within which landlords, tenants and property managers operate.
While much of the conversation has centred around affordability and tenant protection, the implications for the prime lettings market - where transactions are often higher in value and expectations of service are exacting - could be profound.
Key changes
1. Fixed-term tenancies scrapped
All tenancies will move to a periodic model, meaning landlords and agents must redraft agreements and adapt processes. The traditional 12-month contract will no longer apply, and instead, rolling agreements will create both flexibility and uncertainty.
2. Section 21 abolished
Landlords will need to demonstrate valid grounds to regain possession, with longer notice periods and evidential requirements for circumstances such as selling the property or moving back in. This significantly alters the balance of power in tenancy negotiations.
3. Rental rules tightened
Advance payments will be capped at one month’s rent, while asking rents must be published and non-negotiable, aimed at curbing bidding wars. For landlords used to open-market competition, this will change the way properties are marketed and could limit the ability to respond to shifts in demand.
4. Pets
The Lords’ proposal for mandatory pet insurance or additional pet deposits was rejected. Unfortunately, this amendment’s rejection does little to empower tenants; in fact, it may have the opposite effect. Without a mechanism for landlords to recover potential pet-related costs, many are likely to offset this risk by increasing rents across the board, unfairly penalising tenants who don’t have pets for rules designed to benefit those who do.
Impact on prime lettings
For London’s prime markets, which are already supply-constrained, these changes could prove particularly challenging. Extended notice periods mean that landlords may be unable to regain control of their assets quickly, a serious concern for those who may need flexibility for international relocation, family needs or rapid portfolio adjustments.
Compliance requirements are also expected to drive up management costs. While government estimates suggest a modest £25 per property per year, many in the sector believe costs could rise by as much as 10 per cent of annual rent once professional oversight, legal advice and administrative burdens are factored in. In a market where an annual rent can easily exceed six figures, that uplift is far from negligible.
Furthermore, tenants in the prime market often include corporate clients, international assignees and high-net-worth individuals who expect seamless service. A failure to adapt quickly to the new framework could not only impact yields but also reputations.
Compliance as a competitive edge
For professional property managers, however, compliance does not need to be viewed as a burden. Instead, it can be positioned as part of a transparent, premium service that reassures both landlords and tenants.
Firms that invest in strong systems, rigorous tenant vetting and continuous staff training will be better equipped to navigate the new environment. Technology is also set to play a greater role, from digital tenancy management platforms to automated compliance tracking, reducing risk and freeing up managers to focus on client care.
The Bill may also help professionalise the sector by discouraging casual landlords who are unprepared for the new obligations. For established managers operating in the prime space, this presents an opportunity to differentiate through quality, discretion and reliability.
Preparing now
To be ready, prime letting agents and landlords should:
- Review tenancy agreements in line with the new framework, ensuring all contracts reflect the move to periodic arrangements.
- Strengthen compliance processes, from record-keeping to notice procedures, to mitigate disputes.
- Engage in strategic planning with landlords, assessing potential scenarios such as tenant turnover, sales or family occupation and agreeing processes in advance.
- Invest in communication: keeping both tenants and landlords informed will be key to maintaining trust and avoiding misunderstandings.
- Prioritise resilience: ensuring financial models account for longer notice periods, possible rent arrears and additional management costs.
Looking ahead
Reform on this scale rarely comes without challenges, but it also creates a chance for the prime lettings sector to reset expectations. By embracing compliance as a marker of professionalism rather than a box-ticking exercise, landlords and agents can demonstrate leadership in an increasingly scrutinised market.
For discerning clients, the reassurance of robust, legally sound management will become part of the premium offering. Those who hesitate risk being left behind, but those who act decisively will secure their position as trusted custodians of London’s most prestigious homes.
