From 1 May 2026, the landscape for private landlords in the UK changed fundamentally. The Renters’ Rights Act 2025 came into full force this month, and with it came the biggest shake-up of private rented sector rules in more than three decades. Section 21 no-fault evictions are gone. Assured Shorthold Tenancies are gone. Fixed terms are gone. Almost overnight, millions of existing tenancies converted to new assured periodic contracts.
The reaction from landlords has been split. Some have already left. Many more are thinking about it. But a growing number are adjusting their strategy, keeping their heads down, and quietly capitalising on conditions that, for disciplined investors, are arguably the best in over a decade.
What the Act Actually Changes for Landlords
The headline change is the abolition of Section 21. Landlords can no longer issue a notice to quit without giving a legal reason. All evictions now go through Section 8, using specified grounds that range from rent arrears to the landlord requiring the property for personal use. Courts will adjudicate. The process takes longer, and it requires proper documentation from the start.
Alongside that, all tenancies are now periodic from day one. There are no more fixed terms to lock tenants in. Tenants can give two months’ notice to leave at any point. Rent increases must go through a Section 13 notice process, with tenants able to challenge any proposed rise through a tribunal if they believe it is above market rate. Landlords also cannot advertise a property at a price above what they genuinely intend to accept, banning the practice of rental bidding that became common in competitive markets.
One of the lesser-discussed requirements is the Information Sheet obligation. Any landlord with an existing tenancy must provide the government’s official Information Sheet to their tenant by 31 May 2026, or face a fine of up to £7,000.
The Landlord Exodus and What It Means for Those Who Stay
The regulatory pressure is not new. Landlords have been navigating tax relief reductions, higher stamp duty rates on additional properties, and EPC upgrade requirements for several years. The Renters’ Rights Act is, for many, the final straw.
Research from Savills estimates that approximately 93,000 landlords exited the private rented sector in 2025, with a further 110,000 potentially set to follow in 2026. That translates to a substantial reduction in available rental stock at precisely the moment when rental demand remains at near-record levels.
For those who remain, the maths has become rather interesting. Average rental yields across the UK now stand at 7.11%, the highest figure recorded since 2011. Wales leads at 8.4%, with strong numbers across the North of England and Scotland. Buy-to-let lending purchase activity hit £10 billion in the most recent period, matching 2024 and exceeding 2023, clear evidence that investor appetite has not collapsed. It has simply become more selective.
The Structural Shift Toward Limited Companies
One of the most significant shifts in buy-to-let over the past two years has been structural rather than operational. More landlords are now purchasing investment properties through limited company vehicles rather than in personal names. By 2025, buy-to-let limited companies had become the single largest business type registered in the UK, with over 400,000 firms on record.
The driver is largely tax efficiency. Limited companies pay corporation tax on rental profits rather than income tax at marginal rates, and mortgage interest remains fully deductible as a business expense within a company structure. For higher-rate taxpayers building a portfolio, the numbers often look very different through a company versus personal ownership.
At Aton Homes, we work with investors across both structures. The right approach depends heavily on individual circumstances, exit strategy, and portfolio size, which is why we always recommend speaking with a specialist tax adviser before committing either way.
Where Yields Are Strongest Right Now
Location continues to drive outcomes in buy-to-let. The regional picture for 2026 is one of divergence. Northern Ireland led on house price growth in Q1 2026, with annual gains of 9.5%. Yorkshire and the Humber are forecast to see price growth of between 3.5% and 4% over the year, while London lags behind. For yield-focused investors, cities across the North West, Yorkshire, Wales, and Scotland consistently top the tables.
House prices nationally are expected to rise between 3% and 3.5% through 2026, according to leading analysts, while rents are forecast to grow at 2% to 2.5% annually over the next three years. The combination of supply contraction and persistent demand underpins both figures. More landlords leaving means fewer rental properties. Fewer properties chasing the same pool of renters means rents hold, or climb.
That dynamic is unlikely to reverse quickly. Planning constraints, construction costs, and the pace of new build delivery mean the supply shortfall in rental housing will not be fixed by 2027. For investors with a five-to-ten year horizon, the structural case for well-located UK residential property remains intact.
Adapting Rather Than Exiting
The landlords who are navigating this environment best share a few traits. They have tightened their tenant referencing. They keep detailed records on every tenancy from the outset. They have reviewed their insurance policies in light of the new eviction timeline. And they have been proactive about compliance rather than waiting for a notice from a local authority.
The Renters’ Rights Act does raise the bar. But it also raises the floor. A more professionalised market, with better-managed properties and clearer legal processes, is ultimately a healthier long-term investment environment. The landlords who invested in properties they could maintain properly were never really competing with those who were not. Now, the rules have made that distinction explicit.
At Aton Homes, we have been helping investors identify and acquire buy-to-let properties across the UK throughout this period of transition. We understand that the regulatory environment feels daunting right now, and that is exactly why we are here. Whether you are assessing your existing portfolio, thinking about your first investment property, or simply trying to understand what the new rules mean for your situation, we are happy to have that conversation. Visit aton-homes.com or get in touch directly. No pressure, just a straight conversation about where the market stands and where the opportunities are.