The Renters’ Rights Act: What It Means for Landlords (and HMOs) in Southampton

The Renters’ Rights Act 2025, coming into force from May 2026, represents the biggest reform to the private rental sector in nearly 40 years. For landlords, this isn’t just another legislative tweak, but it’s a structural shift in how rental properties are operated, managed, and regulated.

But what does this mean in practice, particularly for HMO landlords?

From stricter rules on evictions and rent increases to a greater emphasis on compliance, the changes will affect how properties are managed day-to-day. Preparing early is key to staying compliant, reducing risk, and protecting your rental income.

Key Takeaways

• The Renters' Rights Act will abolish Section 21 “no-fault” evictions

• Tenancies will shift to a more flexible periodic system

• Landlords must rely on legal grounds to regain possession

• Rent increases will be subject to stricter rules and greater transparency

• Compliance, especially for HMOs, will be critical

• Landlords who prepare early will avoid legal and financial risk

The rental landscape is about to change significantly.

With the Renters' Rights Act coming into force, landlords will need to adapt to a more structured and tenant-focused system. This affects everything from tenancy agreements to eviction processes and compliance standards.

If you wait too long to prepare, small issues can quickly turn into legal and financial risks. With the right strategy and support, however, you can stay ahead and protect your investment.

What’s Changing Under the Renters’ Rights Act?

At its core, the Act is designed to give tenants more security, stronger rights, and better living conditions. 

Here are the key changes landlords need to understand:

1. Section 21 Is Being Abolished

The removal of “no-fault evictions” is one of the most significant changes.

• All tenancies will become periodic (rolling)

• Landlords must provide a valid legal ground for possession

• Evidence will be required if challenged

This fundamentally changes how landlords manage tenancies and regain possession.

2. A New Tenancy System

Fixed-term ASTs will be removed entirely.

• Tenancies will run indefinitely until ended by either party

• Tenants can leave with 2 months’ notice

• Landlords must rely on specific possession grounds

This creates a more flexible system for tenants but requires more structure from landlords.

3. Rent Controls & Challenges

The Act is expected to:

• Limit rent increases to once per year

• Require increases to reflect market value

• Allow tenants to challenge increases at tribunal

This reinforces the importance of accurate initial pricing.

4. Stronger Enforcement & Council Powers

One of the most important, and often overlooked, changes is enforcement.

Local councils will have:

• Increased funding and powers to investigate landlords

• Greater ability to issue penalties and take action

• A stronger role in driving compliance standards

This is not just new legislation. It’s active enforcement.

If you're unsure whether your property meets current standards, it's worth reviewing this detailed guide on HMO compliance in the UK to avoid costly mistakes and ensure full legal compliance.

Failure to comply could result in penalties or restrictions on letting.

HMO Landlords: The Reality Behind the Headlines

There’s been a lot of reaction to the Renters’ Rights Act, from panic to over-optimism.

The truth sits somewhere in the middle.

As one industry expert put it:

“The Renters' Rights Bill isn’t the end of HMOs. But it is the end of winging it.”

Well-Run HMOs Are in a Strong Position

In reality, many professional HMOs are already aligned with these changes:

• Natural tenant turnover (typically 12–18 months)

• Less reliance on Section 21

• Structured management processes

For these landlords, the changes are manageable and even beneficial.

But Informal Management Will Be Exposed

Where landlords will feel pressure:

• Outdated or non-compliant tenancy agreements

• Poor record keeping

• Reactive management styles

The Act is accelerating a shift that was already happening:

Only well-managed, compliant HMOs will thrive.

Student HMOs: A Critical Shift in Strategy

For student landlords, the impact is more significant.

Traditionally:

• Fixed-term contracts align with the academic year

• Properties are reset annually

Under the new system:

• Tenancies become periodic with no fixed end date

• Regaining possession for the next academic year becomes less certain

• Notice must be served using valid legal grounds

What This Means in Practice

• You can no longer rely on automatic tenancy end dates

• Planning for September intakes becomes more complex

• Timing and documentation become critical

For a city like Southampton with a strong student market, this could significantly impact:

• Letting cycles

• Void periods

• Cash flow planning

Compliance: The Biggest Risk (and Opportunity)

If there’s one area landlords cannot afford to overlook, it’s compliance.

The Renters’ Rights Act is clear in its direction: Raise standards and actively enforce them

Council Access & Inspections

Local authorities already have powers to:

• Enter and inspect HMO properties

• Assess safety, conditions, and compliance

• Take action where standards are not met

Many landlords assume inspections are rare or heavily restricted; in reality, councils are becoming far more proactive.

The Most Common Compliance Gaps We See

From working with landlords across Southampton, the biggest risks include:

Fire Safety Management

• Monthly emergency lighting checks

• Regular fire alarm testing

• Clear maintenance records

Fire Risk Assessments (FRA)

• Must be reviewed regularly (typically annually)

• Often outdated or missing entirely

Documentation & Record Keeping

• Safety certificates

• Inspection logs

• Maintenance records

Without these:

• You risk fines and enforcement action

• You could face licensing issues

• You may struggle to defend possession claims

Rent Strategy: Getting It Right From Day One

With rent increases restricted, landlords must:

• Set rents in line with true market value

• Understand tenant demand in their area

• Avoid underpricing or overpricing

This is especially important in HMOs where:

• Room-by-room income matters

• Margins can be tight

• Adjustments mid-tenancy are limited

The Bigger Picture: A More Professional Market

The Renters’ Rights Act is designed to:

• Improve housing quality

• Increase tenant security

• Remove poor practices from the sector 

In reality, it’s doing something else too: Filtering out unstructured landlords

As highlighted by industry commentary:

“The landlords who will struggle… are the same ones who would have struggled eventually anyway - the Bill has just moved up the timetable.”

What Southampton Landlords Should Be Doing Now

Preparation is key.

We recommend:

• Reviewing tenancy agreements and legal documentation

• Ensuring full HMO compliance (especially fire safety)

• Updating fire risk assessments

• Reviewing rent levels against the local market

• Planning ahead for student tenancy cycles

• Understanding possession grounds and timelines

How We Support Landlords at Moorhouse Property Services

At Moorhouse Property Services, we’re already working closely with landlords across Southampton who are reassessing how they manage their HMOs in light of the Renters’ Rights Act.

Because the reality is, for many landlords, these changes introduce uncertainty where there was previously structure. 

We’ve recently visited a number of HMOs following landlord enquiries. Many of which were being managed by high street agents.

In several cases, despite management fees of 15% or more, properties were being treated as part of a large general portfolio, rather than managed as specialist HMOs. 

During these visits, we identified:

• Compliance gaps

• Fire safety issues

• Missing or outdated documentation

The kind of issues that can now lead to enforcement action, fines, or even prosecution under increasing regulatory pressure. 

We’re not here to point fingers, but we’re here to help landlords put the right structure in place.

We work with landlords to:

• Identify risks early

• Bring properties fully compliant

• Improve performance and stability

Our services include:

• Fully compliant HMO management

• Guaranteed rent for consistent income

• Refurbishment and repositioning

• Tenant sourcing & professional management

• Portfolio reviews and strategic advice

Final Thoughts on the Renters' Rights Act

The Renters’ Rights Act isn’t the end of HMOs.

But it is the end of informal systems, reactive management, and “getting by.”

For landlords who are structured, compliant, and proactive, this is an opportunity.

For others, it’s a turning point.

Want to Understand How This Affects Your Property?

At Moorhouse Property Services, HMOs are not a sideline. They are our sole focus. Our management model is designed specifically for the challenges landlords are now facing.

The Renters’ Rights Act isn’t just changing legislation. It’s raising the standard of what’s expected from landlords.

We understand every landlord’s position is different, which is why we offer flexible levels of involvement.

Whether you’re considering refurbishment, management, Guaranteed Rent, or planning your next portfolio move, we offer clear, pressure-free guidance to help you protect your position and move forward with confidence on your terms.

Visit our website to explore our services

Or get in touch for a no-pressure conversation.

We’ll help you protect your investment and move forward with confidence.

FAQ: Renters' Rights Act

When does the Renters' Rights Act start?

Key changes begin from May 1st 2026, including the abolition of Section 21. However, some enforcement powers for councils will take effect earlier, starting in December 2025, meaning Southampton landlords should prepare in advance.

Can landlords still evict tenants?

Yes, but only with valid legal grounds under Section 8.

For example:

• Selling the property

• Moving into the property

• Tenant rent arrears or breach

This makes structured documentation and full compliance essential when managing tenancies.

Will fixed-term contracts disappear?

Yes. Fixed-term tenancies are expected to be replaced with open-ended periodic agreements. This allows tenants to stay indefinitely while giving them the flexibility to leave with notice.

Is this more difficult for HMO landlords?

In many cases, yes.

HMOs already have stricter compliance requirements, and the new legislation raises expectations around safety, documentation, and tenant management.

Well-managed HMOs will adapt more easily, while informal setups may face increased pressure.

Is rent bidding still allowed?

No. Rent bidding will be banned.

Landlords will not be able to accept offers above the advertised rent or request more than one month’s rent upfront.

Can landlords refuse to rent to tenants with children or on benefits?

No. Landlords cannot discriminate based on family status or whether a tenant receives benefits. All applicants must be assessed fairly.

Will landlords need to register with new systems?

Yes. Landlords will be required to:

• Join the PRS database (expected from late 2026)

• Join the PRS Ombudsman (expected by 2028)

  
  

These systems are designed to improve transparency, accountability, and compliance across the rental sector.