If you’re a landlord, the next 24 months will redefine how you operate.
Section 21 is abolished. Rental income faces higher tax rates. Digital quarterly reporting becomes mandatory. All fundamental changes to the business of letting property.
So without further ado, let’s explore what’s happening, when it takes effect, and what you need to do.
The Renters’ Rights Act: 1 May 2026
The Renters’ Rights Act received Royal Assent in October 2025 and takes effect from 1 May 2026.
This Act overhauls the entire private rental sector, changing how tenancies start, how they run, and how they end.
It’s the biggest reform since the Housing Act 1988 – and it affects every landlord in England.
Section 21 Abolished: No More No-Fault Evictions
From 1 May 2026, you can no longer use Section 21 notices to evict tenants. All evictions must now go through Section 8 with a valid possession ground.
The possession grounds have been reformed to make things clearer:
- Selling the property: Stronger grounds when you need to sell
- Moving in yourself or family: Expanded grounds for landlord occupation
- Anti-social behaviour: Easier to evict problem tenants
- Rent arrears: Clearer process for non-payment
You must prove your ground in court. Simply wanting the property back isn’t enough anymore. You need a legitimate, legally defined reason.
All Tenancies Become Periodic from 1 May 2026
Every tenancy – new and existing – converts to a periodic (rolling) tenancy on 1 May 2026. There are no fixed-term contracts anymore.
What this means practically:
- An existing 12-month AST signed in January 2026 will continue until the end of its fixed term, after which it will convert to a periodic tenancy under the new rules.
- You cannot offer new fixed-term contracts after 1 May 2026
- Tenancies roll month-to-month (or week-to-week if rent is paid weekly)
- Tenants can end the tenancy with two months’ notice at any time
- You can only end tenancies using valid Section 8 grounds
The government believes this gives tenants more flexibility without being locked into fixed terms.
Rent Increases: Once Per Year via Section 13 Only
From 1 May 2026, you can increase rent only by Section 13 notices, and only once every 12 months.
The new rules:
- Two months’ notice required (up from one month previously)
- Once per year maximum – you must wait 12 full months between increases
- Tenants can challenge – they have two months before the increase date to challenge at tribunal
- Tribunal can reduce rent if it’s above market rate
- No rent review clauses in contracts anymore
You can serve a Section 13 notice up to four months in advance, as long as the rent increase takes effect after the tenant has spent 12 months in the property.
For existing tenancies with rent reviews or increase clauses in fixed-term contracts, these become void on 1 May 2026. All rent increases must follow the Section 13 process.
Pet Requests Must Be Considered
You cannot use blanket “no pets” policies anymore. When a tenant requests to keep a pet, you must consider it and respond within a set timeframe.
You can refuse for valid reasons:
- Another tenant in the property has allergies
- The property is too small for the pet
- The pet poses a safety risk
- The lease prohibits pets (though this is rare for residential properties)
You cannot refuse simply because you don’t want pets. Tenants may be required to obtain pet damage insurance and pay for it.
In advertising, you cannot state “no pets allowed” upfront. You must be open to considering pet requests on a case-by-case basis.
Discrimination Against Benefits and Children Illegal
From 1 May 2026, it’s illegal to discriminate against tenants who receive benefits or have children.
You cannot:
- Refuse to rent to someone because they receive Universal Credit or housing benefit
- Refuse to rent to families with children
- Make it harder for these groups to rent (withholding property information, preventing viewings, refusing tenancy agreements)
This doesn’t mean you must accept every applicant. You can still use normal tenant referencing, credit checks, and affordability assessments. You just cannot reject someone solely because they receive benefits or have children.
New Written Tenancy Requirements
All tenancies after 1 May 2026 must include specific information in written agreements. The government will publish exactly what must be included in January 2026.
If your current tenancy is based on a verbal agreement, you must provide a written document covering the required information by 31 May 2026.
You must also give tenants a government-produced information sheet explaining the new rules. This will be published in March 2026, and you must provide it to all tenants by 31 May 2026.
What’s Coming Later: Phase 2 and 3
Late 2026 onwards:
- Private Rented Sector Database – all landlords and properties must be registered, rolled out regionally
- Private Rented Sector Ombudsman – all landlords must join by 2028
Phase 3 (2030 onwards):
- Decent Homes Standard for private rental sector
- Awaab’s Law extended to private renting (strict timescales for damp and mould)
- Revised Housing Health and Safety Rating System
Tax Changes Hitting Landlords
The tax treatment of rental income is changing dramatically.
From April 2027, property income gets its own separate tax rates – and they’re higher than standard income tax. Combined with frozen thresholds and changes to how allowances work, most landlords will see their tax bills increase over the next few years.
Property Income Gets Separate Higher Tax Rates: April 2027
From April 2027, rental income gets taxed at new separate rates that are 2% higher than standard income tax:
- Property basic rate: 22% (vs 20% general rate)
- Property higher rate: 42% (vs 40% general rate)
- Property additional rate: 47% (vs 45% general rate)
This means if you’re a higher rate taxpayer with £20,000 rental profit, your annual tax bill rises by £400. For someone with £50,000 rental profit, that’s an extra £1,000 per year.
The government estimates 2.4 million landlords will pay more tax by the end of this Parliament.
Personal Allowance Changes: April 2027
From April 2027, current proposals say the personal allowance must be applied first to employment, trading, or pension income. Only after that can it be set against property, savings, or dividend income.
This means fewer opportunities to shelter rental profits within your personal allowance. The ordering change ensures the higher property tax rates apply to as much rental income as possible.
Frozen Tax Thresholds Continue
Income tax thresholds remain frozen until April 2031:
- Personal allowance: £12,570
- Higher rate threshold: £50,270
- Additional rate threshold: £125,140
With rents rising and thresholds frozen, more rental income gets pushed into higher tax brackets. Someone earning £45,000 from their job and £10,000 rental profit pays 42% on £4,730 of their rental income from April 2027.
Should You Incorporate Your Portfolio?
With property income taxed at up to 47% for individuals but corporation tax at 25%, some landlords are considering moving their portfolios into limited companies.
The case for incorporating:
- Corporation tax at 25% vs personal rates up to 47%
- Mortgage interest fully deductible as a business expense
- More flexibility on profit extraction timing
- Better succession planning options
The case against incorporating:
- Stamp Duty Land Tax on transferring properties (can be 15% on residential properties worth over £500k)
- Capital Gains Tax on the transfer
- More complex accounting and compliance
- Extracting profits as dividends faces dividend tax
- Mortgage interest rates typically higher for limited companies
Incorporation isn’t suitable for everyone, particularly if you want to extract significant profits regularly or if you have large mortgages that would trigger refinancing. This requires professional advice based on your specific situation.
Making Tax Digital: April 2026
Making Tax Digital (MTD) for Income Tax Self-Assessment is HMRC’s programme to digitalise the tax system.
Instead of one annual Self-Assessment return in January, you’ll submit quarterly updates throughout the year using approved software. From April 2026, this becomes mandatory for landlords earning over £50,000 gross rental income.
Who Needs to Comply?
MTD affects landlords based on gross rental income thresholds:
- April 2026: £50,000 or more
- April 2027: £30,000 or more
- April 2028: £20,000 or more
The threshold applies to gross income before expenses. If you have three properties generating £20,000 each (£60,000 total) before expenses of £30,000, you must comply from April 2026 because your gross income exceeds £50,000.
If you also have self-employment income, the thresholds apply to the combined total. Rental income of £30,000 plus self-employment income of £25,000 means you must comply from April 2026 (combined £55,000).
What MTD Requires
Instead of one annual Self-Assessment return, you submit quarterly updates:
Four quarterly updates:
- Q1 (6 Apr – 5 Jul): Due by 7 August
- Q2 (6 Jul – 5 Oct): Due by 7 November
- Q3 (6 Oct – 5 Jan): Due by 7 February
- Q4 (6 Jan – 5 Apr): Due by 7 May
End of Period Statement: After the four quarterly updates, you submit an End of Period Statement to finalise your figures for the tax year.
Final Declaration: By 31 January (same deadline as current Self-Assessment), you submit your final declaration confirming your tax position and make any final adjustments.
The 31 January payment deadline remains unchanged. MTD changes how you report, not when you pay.
Digital Records and Software
You must use MTD-compatible software to keep digital records and submit quarterly updates. Free and low-cost options exist, though many landlords find accounting software like Xero, QuickBooks, or FreeAgent more practical for managing multiple properties.
The software must:
- Store digital records of all rental income and expenses
- Calculate your profit and loss for each quarter
- Submit updates directly to HMRC via the MTD API
Paper records, spreadsheets, and manual systems don’t comply unless you can digitally link them to MTD-compatible software.
Preparing for MTD Now
Start preparing now even if you don’t need to comply until 2027 or 2028:
- Choose MTD-compatible software and start using it
- Digitalise your record-keeping (scan receipts, bank statements)
- Separate business and personal finances clearly
- Practise categorising income and expenses quarterly
- Consider signing up voluntarily for extra HMRC support
High Value Council Tax Surcharge: April 2028
From April 2028, residential properties in England worth over £2 million face an annual council tax surcharge. This is payable by the property owner – you, not your tenant – and is administered through the council tax system.
The surcharge bands are:
- £2m – £2.5m: £2,500 per year
- £2.5m – £3m: £3,500 per year
- £3m – £5m: £5,500 per year
- Over £5m: £7,500 per year
Valuations will be carried out by the Valuation Office in 2026, and these 2026 valuations determine the surcharge from 2028 onwards. Valuations will be repeated every five years.
This affects a relatively small number of landlords, mainly those with high-value portfolios in London and the South East. If you have properties approaching the £2 million mark, watch the 2026 valuations closely.
What You Should Do Now
| Renters’ Rights Act | Tax changes | Making Tax Digital | High-value properties |
| Review all current tenancy agreements – many clauses become void | Model your tax position under the new 22% / 42% / 47% property rates | If you’re over £50,000 gross income, start using MTD software now | Watch 2026 Valuation Office valuations for properties over £1.5m |
| Prepare for Section 8 possession grounds | Calculate the real impact on rental profits | Practise quarterly reporting before it becomes mandatory | Budget for the annual surcharge from April 2028 |
| Review pet policies – blanket bans no longer allowed | Consider whether incorporation makes sense for your portfolio | Digitalise all record-keeping systems | Consider whether market rents allow passing on some of the cost |
| Plan for periodic tenancies and shorter tenant notice periods | Review your overall income structure | Consider voluntary MTD sign-up for extra HMRC support | |
| Check insurance covers periodic tenancies | Plan for higher tax bills from April 2027 | ||
| Adjust to once-yearly rent increases via Section 13 | Understand relief stays at 22% from 2027 | ||
| Provide tenants with the government information sheet | |||
| Issue written terms for verbal tenancies | |||
| Update tenancy agreement templates | |||
| Register with the PRS Database | |||
| Join the PRS Ombudsman |
How Double Point Can Help
The changes hitting landlords between now and 2028 are complex, overlapping, and require careful planning. Your property portfolio structure, tax strategy, compliance requirements, and tenancy management all need to be reviewed.
At Double Point, our chartered accountants work with landlords to understand these changes and identify the best decisions for your specific situation.
We help with:
- Landlord tax planning with the new 2027 property rates and mortgage interest relief
- MTD setup and quarterly compliance for rental income
- Incorporation analysis – whether moving your portfolio into a limited company makes sense
- Personal tax planning and self-assessment filing
- Year-round support rather than just annual tax returns
- Understanding how legislation changes affect your business model
With over 36 years of combined expertise, we’ve helped landlords through numerous regulatory and tax changes.
Book a free consultation with Double Point to discuss how these changes affect your portfolio and the steps you should take before the deadlines strike.