What changes can we expect in 2026? Here, we cover the 4 key legislative changes expected to target the rental sector this year and how you can prepare for them.
While 2025 might have felt like the year of anticipation, this year will undoubtedly be defined as the year of change.
The upcoming reforms will have a significant impact on how landlords manage their portfolios, both this year and in the future. In some positive news, forecasts for rental yields and tenant demand will act as a stability buffer as we navigate the upcoming changes.
Here, we break down the four key changes and share practical steps to help you stay compliant and protect your property investments.
1. The implementation of the Renters’ Rights Act
The Renters’ Rights Act will be implemented in a three-part phased approach, with the first phase of changes taking effect on 1st May 2026.
The reforms will apply to both new and existing tenancies, with the following to be implemented into law automatically on this date:
- Assured Shorthold Tenancies (ASTs) will become Assured Periodic Tenancies (APTs). Existing ASTs will convert into rolling periodic tenancies without an end date, and APTs will be rolling with no fixed term
- Tenants will be able to serve notice with 2 months’ notice at any time
- Landlords will only be able to increase rents through the Section 13 process
- The new rules for advertising properties to let will become law, including a ban on rental bidding, discrimination against those on benefits or with children, and landlords’ ability to refuse pets without good reason
- Section 21 will be abolished, meaning all landlords must use Section 8 to repossess their properties
Any breaches of these rules could result in a civil penalty of up to £7,000 or, if deemed an offence, up to £40,000.
>> Read the full Renters’ Rights Act implementation timeline here.
2. The start of Making Tax Digital
Under Making Tax Digital (MTD), landlords who own rental properties in their personal name and earn income above the relevant threshold will be required to keep digital records and submit quarterly updates to HMRC. This will replace the current annual self-assessment process.
6th April 2026: Any landlords with a total gross revenue from rent and self-employment over £50,000 in the 2024-25 tax year will need to have MTD software in place by the 2026-27 tax year.
7th August 2026: The deadline for the first quarterly update.
Those who meet this threshold should have received a letter from HMRC notifying them about the changes.
Here are some tips to help you prepare if you meet the £50,000 threshold:
- Speak to your accountant to find out which MTD software you can use
- Start transitioning to digital record-keeping to make MTD simpler
- If you use a letting agent, ask how they will support MTD and request digital receipts moving forward
- Open a separate bank account (if you don’t have one already) for your rental business and use it exclusively for receiving rent and paying expenses. This will make integrating a bank account with the MTD software much simpler
>> Read our full guide to Making Tax Digital here.
3. New EPC regulations
Over the past few years, several government consultations have been conducted on the assessment of EPCs and the minimum requirements for rental properties. Although we haven't received any clarity or confirmation on the changes, preparing your properties now could save you thousands in the future.
New assessment metrics
To change the way EPCs are assessed and ensure they offer a more accurate representation of a property’s energy performance, the following metrics were proposed:
- Heating systems: This will provide detailed information on the efficiency and environmental impact of a property’s heating source and encourage the transition to cleaner heating technology
- Fabric performance: This will assess the thermal performance of a property, promoting the importance of well-insulated homes
- Smart readiness: This will assess how a property could integrate technology such as a smart meter to improve energy consumption and bring down running costs
- Energy cost: This will allow landlords to better understand the financial implications of a property’s energy efficiency and plan potential improvements
New minimum requirements
The government has proposed increasing the minimum EPC ratings for rental properties to a minimum of a C by 2028 for all new tenancies and 2030 for existing tenancies.
As we’re just two years away from the first deadline, it’s unlikely the government will be able to implement this change. However, for landlords wanting to get ahead, there are plenty of opportunities that can help you improve your EPC ratings before the government imposes a deadline.
4. The Leasehold and Commonhold Reform Bill
We had expected the draft of the new Leasehold and Commonhold Reform Bill to be published last year; however, we’re still yet to receive it.
The Bill will set out the government's “plans for a comprehensive new legal framework for commonhold”, and is expected to:
- Make commonhold the default for new flats, banning new leasehold flats
- Cap existing ground rents
- End forfeiture for minor breaches
- Simplify lease extensions
We expect the draft Bill to be published early this year. Once we receive this, we’ll have a clearer understanding of the timelines and whether this will be implemented in 2026.
How to navigate the ever-changing private rental sector
With so much change expected for the private rental sector, having expert guidance is essential.
Our experts are here to support you with your property finance plans as we navigate the changing buy to let market. We’ll explore all your options and answer any questions you may have to give you confidence moving forward.
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