Renters’ Rights Act: why it’s good news for letting agents

The Renters’ Rights Act is the biggest change to private renting in England in a generation. For landlords, it means more rules, more paperwork and more risk if they get it wrong. For letting agents, that same complexity is creating demand.

Here’s what the Act changes, why it’s pushing more landlords towards professional help, and why it could be one of the best times in years to own a lettings business.

Key takeaways

• The first phase of the Act took effect on 1 May 2026. Section 21 “no fault” evictions are gone and all tenancies are now periodic.
• A mandatory landlord database starts rolling out from 15 December 2026, with an annual fee of £65 per property.
• More rules mean more landlords looking for help. Compliance is the main reason landlords start using an agent.
• Some landlords are selling up. That’s changing the market, and creating opportunities to buy established agencies.

What the Renters’ Rights Act changes

The Act received Royal Assent in October 2025 and is being introduced in three phases.

Phase 1: from 1 May 2026

• Section 21 “no fault” evictions are abolished. Landlords now need a specific legal ground to regain possession.
• Fixed-term assured shorthold tenancies are replaced by periodic tenancies with no end date.
• Rent can only rise once a year, and landlords can ask for no more than one month’s rent in advance.
• Rental bidding is banned.
• Landlords can’t unreasonably refuse a tenant’s request to keep a pet, or turn away tenants because they have children or receive benefits.

Phase 2: from late 2026

• A national Private Rented Sector (PRS) Database rolls out region by region from 15 December 2026, starting in the West Midlands and reaching all of England by the following autumn. Every private landlord must register, at £65 per property per year (Winkworth).
• Letting or advertising a property without registering could mean a civil penalty of up to £7,000 (Property118).
• A mandatory Landlord Ombudsman follows, expected in 2028.

Phase 3: dates to be confirmed

• The Decent Homes Standard will apply to private rented homes, and Awaab’s Law, which sets deadlines for fixing hazards like damp and mould, will extend to the private sector.

Why landlords are turning to letting agents

Every one of these changes adds work for a landlord. Possession now depends on getting the right ground and the right paperwork. Rent increases need a formal notice. Soon, every property needs registering, with certificates kept up to date.

Many landlords are only partly across it. In one survey of UK landlords, 81% said they understand the Act’s main points, but only 46% had changed how they operate. Just 23% knew about the new landlord database.

That gap is where agents come in. In the same survey, compliance and legal complexity was the most common reason landlords gave for starting to use an agent. Agents are seeing it too. One Propertymark member agent reported replacing landlords who had sold up with landlords who had previously self-managed, some of whom had never used an agent before.

The demand from tenants hasn’t gone anywhere either. Propertymark’s April 2026 report found an average of seven prospective tenants competing for every available rental property.

The honest picture: not every landlord will stay

It would be wrong to pretend the Act is good news for everyone. Plenty of landlords are leaving.

Research from the Deposit Protection Service, carried out just after the Act took effect, found 56% of landlords plan to sell some or all of their portfolio, up from 53% in October 2025. Among landlords with one or two properties, 31% plan to sell everything.

And not every landlord who struggles will hire an agent. Some are leaving agents to self-manage, often because of fees or poor service. Among landlords who switched from one agent to another in the last two years, poor service or communication was the main reason.

So the opportunity isn’t for every letting agent. It’s for agents who make compliance simple, communicate well and give landlords clear value for their fee.

Why this creates an opportunity to own a letting agency

The Act is changing the market in three ways that favour well-run lettings businesses.

1. More landlords need professional management

The landlords who stay are running property as a business. As the rules multiply, more of them want someone who knows the rules to handle it.

2. Recurring income still underpins the model

A lettings business earns monthly management fees on every property it manages. That recurring income is what makes an agency valuable, and what makes it possible to grow one steadily.

3. Agencies are changing hands

The same pressures affect agency owners. Some have spent decades building a business and are now thinking about succession, while compliance costs rise. That’s creating a steady supply of established agencies for sale, with landlords, managed properties and income already in place.

For someone who wants to own a lettings business, buying an established agency can be a faster route than building one landlord at a time. Our guide covers what to check before buying a letting agency.

How Sourced Living fits in

Sourced Living is a lettings franchise built for this market. Partners get the training, technology and compliance support to run a professional lettings business, plus the Flexi-Let model, which lets them offer traditional lets, HMOs and serviced accommodation.

Partners can also buy an established lettings business through Sourced’s funded acquisitions programme. Subject to approval and due diligence, Sourced can fund up to 100% of the purchase.

It’s already working. One Partner, John, completed the acquisition of a business with 262 managed properties just 49 days after induction. The £450,000 purchase was 100% funded by Sourced. Another, Sara, grew her own business to 33 properties, then acquired a Devon agency to take her from 33 to 408 managed properties.

Frequently asked questions

How does the Renters’ Rights Act affect letting agents?

It adds new rules agents must follow on behalf of landlords, including periodic tenancies, new possession grounds, formal rent increase notices and, from late 2026, landlord database registration. Agents who handle this well are seeing more demand from landlords who no longer want to self-manage.

Is it a good time to start a letting agency?

Demand for professional management is rising as the rules get more complex, and tenant demand remains strong. The challenge is building a managed portfolio, which takes time. Buying an established agency is one way to start with income already in place.

Are landlords leaving the rental market?

Some are. A Deposit Protection Service survey found 56% of landlords plan to sell some or all of their properties. Many others are staying and growing, and those landlords increasingly want professional help.

When does the landlord database start?

The PRS Database rolls out regionally from 15 December 2026, starting in the West Midlands, and is due to cover all of England by autumn 2027. Every private landlord will need to register each property, at £65 per property per year.

Can I buy a letting agency without the capital to fund it?

With Sourced Living, approved acquisitions can be up to 100% funded, so you don’t need to raise the purchase price yourself. You do need to join Sourced Living first, and funding is subject to approval and due diligence.

How much rent can you take in advance under the Renters’ Rights Act?

You can’t ask for or accept rent before the tenancy agreement is signed. Between signing and the start of the tenancy, you can usually ask for up to one month’s rent, or 28 days’ rent for other payment periods. Read the government guidance on rent payments and deposits.

Ready to build a lettings business for the new market?

The Renters’ Rights Act has made letting more complex. For landlords, that’s a burden. For a well-run, well-supported letting agency, it’s a reason to exist.

Start a lettings business with Sourced Living, or download the prospectus to see how the model and funded acquisitions work.