Summary
The Renters Rights Act 2025 represents the most significant overhaul of the private rented sector in decades. With implementation beginning 1 May 2026, landlords operating HMOs (Houses in Multiple Occupation) and properties requiring selective licensing face sweeping changes to licensing requirements, enforcement powers, and financial penalties.
This comprehensive guide explains exactly what's changing, who's affected, and what you need to do to stay compliant.
What is the Renters Rights Act 2025?
The Renters Rights Act 2025 (formerly the Renters Rights Bill) received Royal Assent on 27 October 2025. It introduces fundamental reforms to tenancy law, property licensing, and enforcement across England's private rented sector.
Key implementation dates:
27 December 2025: New investigatory powers for local authorities came into effect
1 May 2026: Main tenancy reforms take effect, including abolition of Section 21 and conversion of all tenancies to periodic
Late 2026-2028: PRS Database and Landlord Ombudsman rollout (Phase 2)
2030 onwards: Decent Homes Standard and enhanced property standards (Phase 3)
How the Renters Rights Act Changes HMO Licensing
Extended Liability for Superior Landlords
One of the most significant changes affects who can be held liable for unlicensed HMOs. Previously, only the "person having control" or "person managing" could be prosecuted for licensing breaches under the Housing Act 2004.
The new rules (from 1 May 2026): Section 105 of the Renters Rights Act extends liability to:
Any person having control of or managing the premises (as before)
Any person who is the landlord or licensor in relation to occupants
Any superior landlord – this includes freeholders and intermediate landlords in the chain
This means if you own a block of flats and a leaseholder operates an unlicensed HMO in one of the flats, you could now face prosecution or civil penalties even if you don't directly manage the property.
What this means for freeholders:
You need to monitor whether leaseholders are operating HMOs that require licensing
When granting consent for subletting or HMO use, remind leaseholders of their licensing obligations
Document all actions taken to demonstrate "reasonable excuse" if challenged
Consider what proactive steps to detect unlicensed properties are reasonable
The Upper Tribunal case Kumar v Kolev [2024] UKUT 255 shows that superior landlords can establish a "reasonable excuse" defence if they take appropriate preventive measures, but courts will examine this carefully.
Rent Repayment Orders Now Apply to Superior Landlords
The Act doubles the maximum Rent Repayment Order (RRO) from 12 months to two years' rent. More importantly, tenants can now apply for RROs against:
The immediate landlord (as before)
Any superior landlord who committed a licensing offence
Officers of company landlords
Six new RRO offences added:
Failing to comply with improvement notices
Failing to comply with prohibition orders
Breaching banning orders
Failing to comply with overcrowding notices
Failing to license a property under selective licensing
Breach of management regulations
If you're a superior landlord with unlicensed properties in your building, tenants can claim against you for up to two years of rent – potentially tens of thousands of pounds per property.
Understanding the Three Types of Property Licensing
1. Mandatory HMO Licensing
Required for all properties where:
Five or more people live there
They form two or more separate households
They share kitchen, bathroom, or toilet facilities
This has been required nationwide since 2018, regardless of the number of storeys.
Key requirements:
Fit and proper person test for licence holder
Minimum room sizes (6.51m² for one adult, 10.22m² for two adults)
Adequate facilities (specified bathroom and kitchen ratios)
Fire safety measures
Annual gas safety checks
Five-yearly electrical inspections
Energy Performance Certificate
Costs: Typically £800-£1,500 for a 5-year licence, varying significantly by council
2. Additional HMO Licensing
Additional licensing schemes cover smaller HMOs with 3-6 occupants in designated areas. Since December 2024, councils have implemented these more easily:
Bristol, Nottingham, Southampton, Wandsworth all have active additional licensing
Coverage varies – some councils apply it citywide, others to specific wards
Requirements similar to mandatory HMO licensing
Usually the same fees as mandatory schemes
If you rent to three unrelated people (e.g., three friends sharing), check if your council has an additional licensing scheme.
3. Selective Licensing
Applies to single-household lets in designated areas (covered in detail above).
Quick decision tree:
Is your property let to 5+ people from 2+ households? → Yes: Mandatory HMO licence required
Is it let to 3-4 people from 2+ households? → Check if council has additional licensing scheme. If yes, HMO licence required.
Is it let to a single household (or 1-2 people)? → Check if the property is in a selective licensing area. If yes, selective licence required.
Increased Penalties and Enforcement Powers
Civil Penalties Increase to £40,000
From 1 May 2026, the maximum civil penalty for housing offences increases from £30,000 to £40,000 for:
Continued or repeated breaches
Serious first-time offences
Single breaches can attract penalties up to £7,000.
Common offences attracting penalties:
Operating an unlicensed HMO or selective licensing property
Breaching licence conditions
Failing to provide required information to tenants
Discrimination in the rental market
Failing to comply with improvement notices
New Investigatory Powers (From 27 December 2025)
Local councils gained significant new powers to investigate potential licensing breaches:
Powers to enter and inspect:
Business premises (without warrant)
Residential premises (with warrant)
Powers to demand:
Documents and records
Access to third-party data
Information from landlords, agents, and tenants
What councils can investigate:
All provisions of the Renters Rights Act
Housing Act 2004 offences (HMO licensing, selective licensing, HHSRS)
Banning orders (Housing and Planning Act 2016)
Letting agent requirements (Enterprise and Regulatory Reform Act 2013)
Councils must now report annually to the Secretary of State on enforcement activity, creating pressure to demonstrate active enforcement.
How the Renters Rights Act Affects Existing HMO Tenancies
No More Fixed-Term Tenancies from 1 May 2026
All assured shorthold tenancies (ASTs) automatically convert to assured periodic tenancies on 1 May 2026. This includes existing fixed-term agreements.
What happens to your HMO tenancies:
Fixed terms end – all become periodic (month-to-month or based on rent period)
Section 21 "no fault" evictions abolished
Landlords must use grounds under Section 8 for possession
Tenants can give 2 months' notice to leave (or less if tenancy agreement states shorter)
Important: You don't need to reissue tenancy agreements, but you must provide tenants with:
Information Sheet by 31 May 2026 (government will publish in March 2026)
Written Statement of Terms by 31 May 2026 (for verbal agreements)
Failure to provide these documents can result in civil penalties up to £7,000.
Rent Increases Must Follow New Rules
From 1 May 2026, all rent review clauses become void – including RPI, CPI, or percentage increases written into tenancy agreements.
New rent increase procedure:
Maximum once per year
Minimum 2 months' notice using Section 13 procedure
Tenants can challenge increases at First-tier Tribunal within first 6 months
Tribunal will assess if rent is at "market rate"
Landlords cannot:
Require more than one month's rent in advance
Charge "bidding war" premiums
Discriminate against tenants with children or on benefits
Compliance Checklist for HMO and Licensed Property Landlords
Before 1 May 2026
[ ] Verify licensing status: Confirm all properties have correct licences (mandatory HMO, additional HMO, or selective)
[ ] Check for new schemes: Review if councils have introduced new selective or additional licensing schemes in your areas
[ ] Apply for licences early: Don't wait until deadlines – applications can take months
[ ] Review superior landlord risk: If you're a freeholder, assess which leaseholders might be operating unlicensed HMOs
[ ] Update property standards: Ensure compliance with minimum room sizes, fire safety, electrical safety
[ ] Document fit and proper person status: Gather evidence that licence holders meet requirements
[ ] Review mortgage terms: Check if HMO operation complies with lender requirements
By 30 April 2026
[ ] Last chance for Section 21: If you need to serve Section 21 notices, do so before 4:30pm on 30 April 2026
[ ] Review existing tenancies: Understand which will convert to periodic and how
By 31 May 2026
[ ] Provide Information Sheet to all existing tenants: Government will publish online in March 2026
[ ] Provide Written Statement of Terms: For any verbal tenancy agreements
Ongoing from 1 May 2026
[ ] Use new prescribed forms: For notices, rent increases, possession proceedings
[ ] Follow Section 13 for rent increases: No more contractual rent review clauses
[ ] Document everything: Keep records of all communications, inspections, and compliance
[ ] Monitor licence renewals: Most licences last 5 years – track renewal dates
[ ] Stay informed: Councils' enforcement priorities and new schemes continue to evolve
Common Questions About HMO Licensing and the Renters Rights Act
Do I need both HMO licensing and planning permission?
Often yes. Licensing is separate from planning:
Planning permission: Required to use the property as an HMO (changing from C3 to C4 or Sui Generis)
HMO licence: Required to rent the property as an HMO legally
Many councils (over 100) have Article 4 directions removing automatic permitted development rights for HMO conversions. Check your local planning authority.
What happens if I'm caught operating without a licence?
Potential consequences:
Civil penalty up to £40,000 (increased from £30,000)
Prosecution with unlimited fine
Rent Repayment Order up to 24 months' rent (doubled from 12 months)
Cannot use Section 21 to evict (now irrelevant after 1 May 2026)
Cannot use Section 8 possession grounds in some circumstances
Damage to reputation and future licence applications
The financial risk is substantial – a typical 5-bed HMO renting for £2,500/month faces potential RRO liability of £60,000, plus civil penalties up to £40,000.
Will councils enforce more aggressively?
Yes, for several reasons:
New reporting requirements: Councils must report enforcement activity annually to the Secretary of State
Enhanced powers: Easier to investigate, inspect, and access information
Higher penalties: Greater deterrent and revenue from enforcement
Public pressure: Increased focus on rogue landlords and poor housing standards
Superior landlord liability: Freeholders now have incentive to report unlicensed properties
Many councils have already ramped up enforcement. London councils alone have issued over £10 million in fines to rogue landlords in recent years.
Can I challenge a selective licensing designation?
Challenges must be brought by judicial review within three months of the designation being confirmed. Grounds might include:
Procedural irregularity in consultation
Insufficient evidence of need
Scheme covers >20% of private rented sector without Secretary of State approval
Scheme is irrational or disproportionate
However, since December 2024, councils can designate schemes more easily under the General Approval 2015, making successful challenges harder.
How long do licences last?
Standard term: 5 years for HMO and selective licences
Reduced term: 1-2 years if property has previous issues, licence holder has poor track record, or compliance is uncertain
Licence conditions typically require:
Annual gas safety checks
Five-yearly electrical inspections
Adequate fire safety measures
Provision of waste disposal facilities
Maintaining accurate tenancy records
Providing written tenancy agreements
Responding to repair requests promptly
Breaching licence conditions can result in civil penalties or prosecution.
How Barnab Can Help With Your HMO and Licensing Applications
Navigating the complex landscape of HMO licensing, selective licensing, and Renters Rights Act compliance can be overwhelming. Application requirements vary by council, fees run into thousands of pounds, and rejection rates exceed 60% for unprepared applications.
Barnab simplifies the entire process:
Pre-Application Assessment
Determine exactly which licences your property needs
Check for Article 4 directions and planning requirements
Identify compliance gaps before you apply
Avoid costly application rejections
Application Preparation
Generate compliant floor plans and fire safety documentation
Complete applications accurately for your specific council
Compile all required supporting documents
Ensure your property meets room size and facility requirements
Ongoing Compliance Support
Track licence renewal dates
Monitor new licensing schemes in your areas
Stay updated on regulatory changes
Access expert guidance for hearings and appeals
Cost Savings
Avoid rejection fees (typically £1,000-£2,000+ per failed application)
Reduce professional fees
Prevent penalties for non-compliance
Save time with streamlined process
Whether you operate a single HMO or manage a large portfolio across multiple councils, Barnab provides the expertise and tools to stay compliant in the evolving regulatory landscape.
