Most of the Renters' Rights Act is about how you let, not what you earn. But almost every change moves risk from the tenant to the landlord, and risk has a price.
Before deciding anything, work out what the property leaves you after costs, mortgage and tax, as a share of the cash you have in it. Then ask whether that return is enough for the extra risk you now carry.
What changed
- Rent rises can only happen once a year, by formal notice, and the tenant can take any rise to tribunal. The new rent only starts from the tribunal's decision, with no backdating.
- Your income is only certain two months ahead, because tenants can leave at any time on two months' notice.
- Getting the property back takes longer and can only be done on specific grounds.
- Mistakes cost more: civil penalties of up to £7,000, up to £40,000 for serious or repeated breaches, and rent repayment orders of up to two years' rent.
What it means for you
- Assume slower rent growth than before. If a tenant challenges a rise, it may be months before you see any of it.
- Budget for longer and more frequent empty periods, and for the letting, referencing and cleaning costs each change of tenant brings.
- Allow for compliance: the landlord register fee, ombudsman membership, safety certificates and better record keeping.
- From April 2027 rental profit is also taxed at 24%, 44% or 49%, four points more than other income. LEXIT includes this in every forecast.
Run your own numbers
LEXIT works out your return on cash, ten years of after-tax income and what a sale would leave you. It takes about five minutes per property.