Government sets out rules for when tenants want to leave under the Renters’ Rights Act

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Government sets out rules for when tenants want to leave under the Renters’ Rights Act

The government has released guidance on how a landlord can end a tenancy if their tenant wants to leave.

Landlords should know they will not be able to give their tenants more than two months’ notice for a tenant to leave.

The new rules will come into effect on 1 May 2026 when the Renters’ Rights Act comes into force.

Tenant will need to pay rent during the notice period before the tenancy ends

According to the government guidance, landlords will be able to agree with their tenant to end the tenancy earlier or have a shorter notice period. This will need to be in writing.  The tenant will need to give their notice:

• so the tenancy ends on a day when the rent is due or the day before the rent is due
• in writing, for example, by letter, email or text

It’s important for landlords to know that under the new rules, the landlord cannot tell the tenant what method they must use to give their notice. The tenant is free to choose any written method, such as a letter, email, or text message.

The tenant will need to pay rent during the notice period before the tenancy ends.

The government guidance also says that if the tenant has already given notice but then changes their mind and wants to stay in the property, they can only stay if the landlord agrees to this in writing. If the landlord does not agree, the tenancy will end as planned.

Joint tenancies guidance

For joint tenancies, the government also gives guidance on what landlords should do.

According to the guidance, a tenant will be able to end the joint tenancy without the agreement of the other tenants.  If a joint tenant asks to give a shorter notice period, all the other joint tenants will need to agree to the shorter notice period.

If a joint tenant changes their mind and would like to stay, all the other joint tenants will also need to agree. If they do not agree, then the tenancy will need to end.

The guidance adds if some of the existing tenants want to stay, the landlord will be able to create and sign a new tenancy agreement.

Landlords will also be able to add new tenants to an existing tenancy agreement.

Property118 commercial reality check

Government rule changes often ignore the operational reality landlords face every day. The new notice requirements place yet another layer of responsibility on those already carrying the commercial risk. Serious landlords succeed by turning that pressure into structure, not stress.

What serious landlords should do next

Protect your position with clear written records. Tenants can now give notice by almost any written method, which increases the chance of ambiguity. Keep a disciplined record of every message and confirm key points back in writing to avoid misunderstandings.

Map out your tenancy timelines. Create a simple schedule of rent-due dates, expected notice windows and projected void risks. This restores predictability and helps you plan maintenance, cash flow and refinancing with confidence.

Set firm expectations for joint tenancies. Joint tenants can now terminate without unanimous agreement, which places extra risk on the landlord. Define your internal process for handling exits, replacements and new agreements to keep control of the transition.

Advantage through professionalism

Every new rule adds friction. Professionals respond by tightening process, sharpening documentation and protecting cash flow. That is how competent landlords stay resilient while others feel squeezed.

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Loan Covenants Explained – Avoiding Traps in Your Commercial Mortgage Agreement

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Loan Covenants Explained – Avoiding Traps in Your Commercial Mortgage Agreement

Loan covenants are one of the least understood parts of a commercial mortgage agreement. Many landlords focus on rate and loan size but overlook the conditions that govern how the facility must be managed. Breaching a covenant can trigger penalties, force refinancing, or even give the lender rights to call in the loan. Understanding covenants – and negotiating them carefully – is essential to protecting your portfolio.

What Are Loan Covenants?

A loan covenant is a condition in the loan agreement that requires the borrower to meet certain financial or operational obligations. They are designed to give lenders confidence that the loan remains sustainable throughout its term.

Covenants usually fall into two categories:

• Financial covenants – such as maintaining minimum interest cover, maximum loan-to-value ratios, or liquidity reserves.
• Non-financial covenants – such as restrictions on additional borrowing, reporting requirements, or obligations to maintain insurance and property condition.

Common Covenant Traps

• Unrealistic interest cover ratios – set at levels that are difficult to maintain if interest rates rise or rents fall.
• Rigid loan-to-value triggers – which may require capital injection if property values dip, even temporarily.
• Restrictive reporting – quarterly reporting requirements that create administrative burden without adding real value.
• Limitations on flexibility – such as prohibitions on refinancing or selling properties within the portfolio without lender consent.

Why Lenders Use Them

Covenants exist to protect lenders, ensuring early warning signs are spotted before defaults occur. However, poorly negotiated covenants can unfairly restrict landlords, reduce flexibility, and increase financial risk unnecessarily.

Practical Examples

• A landlord agrees to a covenant requiring a minimum 150% interest cover. When interest rates rise, they fall into technical breach despite continuing to meet monthly payments.
• A portfolio owner accepts an LTV covenant at 65%. A temporary fall in valuation forces them to inject cash or refinance, even though rental income remains stable.
• An HMO operator faces delays expanding their business because the facility prohibits further borrowing without lender approval.

How to Negotiate Better Terms

Covenants are not set in stone. With professional guidance, landlords can often negotiate:

• More realistic interest cover ratios, aligned with actual portfolio performance.
• Higher LTV thresholds or flexibility during valuation downturns.
• Annual rather than quarterly reporting to reduce administrative load.
• Clear carve-outs for routine refinancing or disposals.

The Role of NACFB Brokers

NACFB brokers ensure covenants are commercially workable. They know which lenders are flexible, how to present a case for more realistic terms, and how to protect landlords from traps hidden in the small print. Their oversight ensures that finance supports growth rather than restricting it.

Conclusion and Takeaway

Loan covenants are just as important as rates and terms in a commercial mortgage agreement. Landlords who understand and negotiate them properly avoid unnecessary risks and protect their flexibility. With the right broker, covenants can be structured to balance lender security with landlord freedom.

Next Steps

If you would like an NACFB broker to review or negotiate covenant terms on your next finance deal, please complete the short form below and a consultant will be in touch.

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Published: 10 December 2025

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Poor tenants shut out of social housing on affordability grounds

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Poor tenants shut out of social housing on affordability grounds

Tenants on the lowest incomes are being blocked from social housing because providers fear they will not be able to afford the rent, research reveals.

A study by homelessness charity Crisis shows housing associations in England are increasingly rejecting applicants following affordability checks carried out before a tenancy begins.

Around a third of English housing associations taking part said those checks frequently uncovered information that led them to conclude an offer was unsuitable.

Almost a quarter said households earning below certain thresholds were at times excluded entirely from housing registers.

That means some poorer applicants never reach the point of being considered for a social home, not because of behaviour or need, but over income issues to sustain a tenancy.

Where will tenants go?

The charity’s chief executive, Matt Downie, said: “Working with people who use our services, we know that people can be excluded from accessing a social home because their incomes are too low to meet the necessary criteria.

“The fundamental aim of social housing is to provide a safe and stable home for people on the lowest incomes.

“If people cannot afford social housing, where do they go?”

He added: “The reckless depletion of our social housing stock, alongside cuts to state support, has put English housing associations into an impossible position where they are forced to refuse access to people in precarious, vulnerable situations.

“Homelessness is surpassing record levels. Its costs to people, communities and local authorities are untenable.”

Change in allocation handling

Nearly three quarters of associations, accounting for 90% of the homes in the sample, said recent changes to benefits had altered how allocations and lettings are handled.

Limits on housing benefit and the benefit cap have pushed providers to scrutinise affordability more closely.

At the same time, associations reported a growing concentration of applicants with complex support needs.

As a result, unless someone faced acute circumstances such as severe ill health or domestic abuse, access to a social tenancy was described as unlikely or subject to long delays.

Even for households that do secure a property, there were fears that inadequate support beyond housing could make keeping the tenancy far harder.

Unsuitable tenants

One in four English housing associations said they often turned down nominations from councils because the proposed let was judged unsuitable.

Some cited the need for costly adaptations or the absence of specialist support as reasons for prioritising certain tenants.

Applicants with a history of anti-social behaviour faced the greatest exclusion.

Three quarters of associations said registers would sometimes or always shut out such households where no support package existed.

Still, more than half said exclusions could apply even when assistance was in place.

How houses are used

Researchers from Heriot-Watt University and the UK Collaborative Centre for Housing Evidence say that housing associations compared the task of allocating scarce properties to rearranging the deckchairs on the Titanic.

Almost three quarters operating choice-based lettings said the homes available bore little relation to the needs presented, with some doubting any system could prioritise demand given the numbers involved.

Rising repair costs and tighter building standards were also flagged as pressures limiting new development.

Crisis is urging ministers to overhaul how existing stock is used, pointing to Scotland where refusals on suitability grounds are far rarer.

While a quarter of English associations reported frequently rejecting council nominations, just 6% of Scottish providers said the same.

More than half of new social lets north of the border go to homeless households, compared with just over a quarter in England.

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