27/03/2026
The Renters' Right Act (RRA) 2025 represents the most significant overhaul of the private rented sector in a generation. By abolishing “no-fault” evictions and transitioning all assured tenancies to a rolling periodic model, the Act fundamentally alters the legal and operational landscape the whole housing sector including for Integrated Retirement Communities (IRCs) and traditional retirement housing providers.
For the retirement sector, these changes bring unique challenges. The move away from fixed-term tenancies impacts long-term financial planning, key to securing investment into the sector, and new rules regarding rent increases and service charge integration require a complete review of standard tenancy agreements. Understanding how these reforms interact with the specific needs of elderly residents and the specialised nature of retirement schemes is now a critical priority for CEOs, developers and asset managers.
The FAQs below provide a concise breakdown of the RRA 2025 through the lens of the retirement living sector. It addresses the core regulatory shifts, from lack of sector exemptions, to the practicalities of rent reviews and the often-overlooked tax implications for tenants.
Frequently Asked Questions – Renters' Rights Act 2025 and the Retirement Living Sector
- Does the RRA 2025 contain a general exemption for housing for the elderly?
No, there isn’t a general exemption for the sector and the retirement living/IRC private rental sector is treated no differently to the general private rental sector.
- What kind of tenancy agreement can now be granted by landlords in the private rental sector?
From 1st May 2026, landlords will no longer be able to grant Assured Shorthold Tenancies (ASTs) for a fixed contractual term. Fixed term tenancies have been abolished by the RRA 2025, so that after 1st May 2026 landlords will now only be able to grant assured periodic tenancies. These tenancies will continue in perpetuity, until terminated by the tenant by giving written notice to the landlord (two months’ notice if paying rent monthly), or until properly terminated by the Landlord.
No fault ‘section 21’ evictions by landlords have been abolished by the RRA 2025. After 1st May 2026, landlords will only be able to terminate tenancy agreements on the grounds set out in Schedule 2 the Housing Act 1988 (HA 1988) (as amended by the RRA 2025).
In effect, assured periodic tenancies are lifetime tenancies for a tenant. They are rolling contracts with no fixed end date allowing the tenant to live in the property for the rest of their life, provided that they do not breach the conditions of their tenancy agreement. As this would be an assured tenancy, the tenancy agreement can also be passed to a spouse or civil partner on the death of the tenant, subject to the landlord’s grounds for possession on the death of the tenant referred to below.
- What grounds for possession may be relevant to the retirement living/IRC private rental sector and how much notice must the landlords give to the tenant?
The table below sets out key grounds for possession of a tenanted property pursuant to schedule 2 of the HA 1988 (as amended by the RRA 2025), which are relevant to the retirement living/IRC private rental sector and relevant information relating to the ground for possession. The following grounds (which come into force from 1st May 2026) are mandatory grounds for possession, where a Court has to issue a possession order in favour of the Landlord:
Updated HA 1988 mandatory grounds for possession Useful Information Landlord’s Notice Period Sale of property Landlord intends to sell the property NB tenancy must have existed for 12 months before the relevant date 4 months Mortgage repossession If property is subject to mortgage and lender exercises power of sale requiring vacant possession 4 months Death of tenant Tenancy has passed on by will or intestacy. Possession proceedings must begin within 12 months of death. 2 months Rent arrears Tenant is at least 3 months (or 13 weeks) in arrears at the time the notice is served and the date of the Court hearing 4 weeks The following table sets out key discretionary HA 1988 grounds for possession available to a landlord, which are relevant to the retirement living/IRC private rental sector. These grounds remain unamended by the RRA 2025. In relation to these discretionary grounds, the Court will need to be satisfied that it is reasonable for a possession order to be made (i.e. there is no guarantee that a possession order will be made):
HA 1988 discretionary grounds for possession Useful Information Landlord’s Notice Period Any rent arrears The tenant is in any amount of arrears on the day the notice is served and on the date of the Court hearing 4 weeks Persistent arrears The tenant has been persistently late paying their rent 4 weeks Breach of tenancy agreement There have been other breaches of the tenancy agreement by the tenant (other than payment of rent) 2 weeks - Can a landlord increase the rent payable by the tenant and on what basis?
From 1st May 2026, any contractual rent review clauses within a tenancy agreement, such as prescriptive indexed linked rent review clauses will be invalid and unenforceable.
Landlords will only be able to increase rents once per year by giving two months’ notice through the section 13 (of the HA 1988) notice procedure, in which the landlord will specify the new rent payable. This will place an administrative burden on landlords as they will have to serve these notices annually in order to increase the annual rent. The new rent will be payable from the date of expiry of the two month notice period.
From 1st May 2026, tenants will also be able to challenge the initial level of rent payable under a tenancy agreement if they believe they are paying above ‘market rent’ provided that they issue the necessary challenge within 6 months of the start of the term of a tenancy agreement.
- What happens if a tenant objects to the rent increase specified in the landlord’s section 13 notice?
RRA 2025 varies section 14 of the HA 1988 and sets out when a tenant can apply to the First Tier Tribunal (FTT) to challenge the rent increase amount. A tenant of an assured tenancy can apply to the FTT in the prescribed form to challenge an increase in rent proposed if they believe the rent increase to be above ‘market rent’.
The rent shall take effect from the beginning of the new period specified in the landlord’s section 13 notice or (if it appears to the FTT that it would cause undue hardship to the tenant) a date directed by the FTT (being no later than the determination date).
Further, Government guidance states “If a tenant believes the proposed rent increase exceeds market rate, they can then challenge this at the First-tier Tribunal, who will determine what the market rent should be. We will reform how the Tribunal works to ensure tenants feel confident in challenging poor practice and enforcing their rights. Currently, tenants face the risk that the Tribunal may increase rent beyond what the landlord initially proposed – we will end this, so tenants never pay more than what the landlord asked for. We will also end the practice of backdating rent increases – with the new rent instead applying from the date of the Tribunal determination – to ensure tenants are not unexpectedly thrust into debt. And, in cases of undue hardship, we will give the Tribunal the power to defer rent increases by up to a further 2 months.
To ensure tenants always have a right of appeal, and prevent backdoor evictions, rent increases by any other means – such as rent review clauses – will not be permitted. This will also ensure all parties are clearer on their rights and responsibilities.”
- Following the RRA 2025 changes what is the position on rent review if the annual rent is inclusive of service charge?
If the service charge is included within the annual rent, from 1st May 2026 the annual rent (including the service charge) can only be increased once per year through the section 13 procedure specified above and is open to challenge in the same way by tenants.
How the FTT will consider applications to challenge service charge inclusive rent increases in the sector is not yet known, as there are likely only going to be a handful of like for like comparables for equivalent properties the FTT can use to determine the ‘market rent’.
Consideration will need to be taken by landlords as to whether they offer a service charge inclusive rent rental product or separate all or part of the variable service charge from the annual rent in the tenancy agreements to avoid tenant challenges on variable service charge increases (although tenants would still be able to challenge these charges under the existing protections contained within the Landlord and Tenant Act 1985 and 1987).
- What are the Stamp Duty Land Tax (SDLT)/Land Transaction Tax (in Wales) (LTT) implications of the RRA 2025 for tenants?
From 1st May 2026, as a result of the abolition of fixed term tenancies, tenants may have to submit annual SDLT/LTT returns (as applicable) if their cumulative rent during their period of occupation exceeds certain thresholds, and in some instances, tenants may have SDLT/LTT to pay.
In simple terms, the higher the annual rent and longer the period of occupation the more likely the tenant is to have to make SDLT/LTT returns and pay SDLT/LTT (if applicable). If the service charge is included in the rent (without a clear separation of the relevant sum from the principal rent), it is possible that the service charge element of the annual rent would have to be included within the tenants’ SDLT/LTT calculations making the requirement to submit annual returns and make tax payments more likely for tenants.
Tenants should be encouraged to take their own tax advice both before entering into the tenancy and on an annual basis to determine whether a tax return or a tax payment is required.
Key Contacts
If you have any queries or comments about the above, please contact Sarah Skuse, partner, or Nick Thackray, partner.
