Renters’ Rights Act breaching Buy to Let mortgage terms and conditions?

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Renters’ Rights Act breaching Buy to Let mortgage terms and conditions?

Hi Everyone, With the Renters’ Rights Act stating that all tenancies are to be periodic from May 2026, how will that affect Buy to Let mortgages that have terms that condition the tenancy must be an AST?

Are we being forced by the Act to breach mortgage Terms and Conditions?

Is there a provision in the act for this anomaly?

Kevin

Editor’s Note:

What the Renters’ Rights Act Does

The RRA abolishes fixed-term ASTs and replaces them with a single assured periodic tenancy (APT) for residential lets from 1 May 2026 (the commencement date). This means:

All current fixed-term ASTs will automatically convert to periodic tenancies on that date.

After commencement, landlords cannot grant new fixed-term ASTs, and every tenancy will be rolling (e.g., monthly).

Tenants can end tenancies by giving statutory notice (e.g., 2 months).

This is a statutory change to housing law, and it replaces the AST regime under the Housing Act 1988 with a different form of assured periodic tenancy.

Mortgage Terms Requiring ASTs

Many buy-to-let mortgage contracts currently include wording like:

“The property must be let on an Assured Shorthold Tenancy (AST) in line with the Housing Act 1988.” Lenders Handbook

This is because lenders traditionally saw fixed-term ASTs as giving a predictable income stream and clear possession rights.

With the AST regime abolished by statute, landlords won’t be able to comply with those specific contractual terms anymore because, quite simply, ASTs will no longer exist.

Does the RRA Force You to Breach Your Mortgage Terms?

No, not technically.

Statutory Override

The RRA changes housing law, and statutory law generally overrides private contracts where there is a conflict (e.g., you can’t give a fixed-term AST if the law forbids it).

A lender’s requirement for an AST becomes impossible to fulfil, not something you are choosing to breach.

Lenders Will Need to Update Mortgage Conditions

Lenders, especially mortgage underwriters and their legal team, will have to revise their acceptable tenancy definitions to reflect the new assured periodic tenancy regime, because the old AST form will no longer be lawful.

Industry guidance (e.g., mortgage handbook acceptability criteria) is already tied to ASTs, but these frameworks will need to be updated as the law changes. Lenders Handbook

Practical Position

Post-Commencement, your tenancy will be what the statute says it is: an assured periodic tenancy. You will not be in breach of housing law by offering this; it’s the only lawful form.

If there is a conflict with a mortgage condition that hasn’t been updated, you would raise it with your lender.

What Lenders Are Likely to Do

While we don’t yet have a unified published set of post-RRA mortgage criteria from lenders, industry commentary suggests:

Lenders will adjust product terms

Mortgage lenders will update wording so that assured periodic tenancies are acceptable instead of ASTs.

Underwriting criteria may emphasise tenancy stability, rental income security, and possession rights under the new Section 8 regime rather than fixed-term ASTs.

Possible shift in risk assessment

Some lenders might adopt stricter serviceability tests, higher rental coverage requirements, and more cautious criteria (e.g., higher deposits or LTV limits) due to perceived volatility with periodic tenancies. Kerr & Watson

No automatic breach

Simply having periodic tenancies because the law changed will not, on its own, put you in breach of your mortgage. If a lender tries to enforce an AST requirement after 1 May 2026, that mortgage condition will likely be unenforceable to the extent it requires something illegal/illegal to grant.

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Illegal Activity by Tenants – Are You Covered?

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Illegal Activity by Tenants – Are You Covered?

One of the worst-case scenarios for landlords is discovering that tenants have used a rental property for illegal activity. Cannabis farms, unlicensed HMOs, or even organised crime can leave behind major damage, loss of income, and potential legal consequences. The immediate question for most landlords is: does my insurance cover this? The answer depends on the wording of your policy, your disclosure at inception, and whether you met inspection requirements.

Common Types of Illegal Activity in Rental Properties

• Cannabis farms – tampered electrics, water damage, mould, and structural weakening from extraction systems.
• Subletting and unlicensed HMOs – breaching licence conditions, fire safety rules, and creating liability exposures.
• Fraudulent use – tenants using the address for identity fraud or illegal businesses.
• Anti-social behaviour – drug dealing, disorder, or activities that create reputational risk for the landlord.

How Insurers Typically Respond

Most landlord insurance policies exclude damage or liability arising from illegal activity. However, some specialist insurers will cover malicious damage caused by tenants engaged in illegal use, provided you can show you took reasonable precautions and complied with inspection conditions. The outcome often hinges on evidence.

Inspection Requirements

To reduce risk, many insurers insist on regular documented inspections. For example:

• Inspections every 3 months (some require every 6–12 weeks).
• Written logs and, ideally, date-stamped photos.
• Prompt reporting of any concerns to insurers or authorities.

Failure to inspect may give insurers grounds to decline a claim, arguing that the landlord did not meet policy conditions.

What About Malicious Damage?

If illegal activity results in deliberate destruction, some policies will pay under malicious damage by tenants – but only if this extension is included. Even then, insurers may refuse claims if they believe the landlord failed to exercise proper tenant checks or inspections.

Loss of Rent – Grey Areas

Loss of rent cover usually applies after an insured peril such as fire or flood. It rarely applies when tenants are evicted due to illegal use. Some specialist policies extend to loss of rent following police closure or malicious damage, but this is not standard. Landlords should not assume rent will continue if a property becomes uninhabitable after illegal activity is discovered.

Practical Steps to Protect Yourself

• Carry out robust referencing and check ID thoroughly.
• Conduct regular inspections and keep records.
• Look out for red flags – covered windows, unusual condensation, tampered electrics, or complaints from neighbours.
• Ensure your policy explicitly includes malicious damage by tenants if you want protection.
• Notify your insurer if the property changes use (for example, becoming an HMO) to avoid non-disclosure issues.

Case Example

A landlord discovered their tenants had converted a three-bedroom semi into a cannabis farm. The electrics had been bypassed, causing fire risk, and the property was saturated with condensation and mould. The insurer initially declined the claim under the “illegal activity” exclusion. However, because the landlord provided quarterly inspection records showing no signs of the operation until the final month, the insurer paid for malicious damage repairs (but not lost rent). This highlights the importance of evidence and compliance.

Final Thoughts

Illegal activity in rental properties is a nightmare scenario, but landlords can protect themselves by choosing the right policy and maintaining strong inspection and referencing records. Do not assume standard landlord insurance will cover malicious damage or loss of rent after illegal activity – check your wording and speak to a broker who understands landlord risks.

Request your quote or call-back

The most efficient way to get a personal quote with the best price and cover possible is to call the team on 01832 770965 so we can focus on your enquiry when you are ready and sitting down with your portfolio details to hand.

Alternatively, you can use the form below to request one of our team to give you a call back.

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Publication date: Tuesday 23 December 2025

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Fewer renters moving as section 21 notices decrease – Generation Rent

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Fewer renters moving as section 21 notices decrease – Generation Rent

A new Generation Rent survey reveals a decline in Section 21 notices and a drop in rent increases.

In a poll of 711 renters about the upcoming Renters’ Rights Act, despite a drop in Section 21 notices, the number of Section 8 notices has risen.

The survey comes ahead of the implementation of the Renters’ Rights Act on 1 May 2026.

Decline in Section 21 notices

According to the survey, the proportion of people having to move has fallen since 2024, which Generation Rent say is a result of a decline in Section 21 notices.

In the survey, the tenant group claim former Chancellor Jeremy Hunt’s decision to cut the higher rate of capital gains tax from 28% to 24% in the Spring Budget 2024 “led to the receding of a spike in evictions following the tax cut for landlords, meaning fewer have been selling up this year. It may also be due to fewer landlords evicting to raise the rent, because rents on new tenancies haven’t been rising as quickly this year.”

In this year’s Autumn Budget, Chancellor Rachel Reeves raised tax rates on dividends, property, and savings income by 2 percentage points.

Elsewhere, the survey reveals that the proportion of renters being served a Section 8 eviction notice has increased.

The tenant group claim this could be due to rising rent arrears caused by the Local Housing Allowance (LHA) being frozen.

Generation Rent predict that, with the upcoming Renters’ Rights Act, eviction trends will change, with the number of eviction notices expected to fall once Section 21 is abolished.

The survey says: “We should see a further fall in these numbers after May 2026, and Section 8 should become the only game in town for landlords who want to evict tenants.

“Along with Section 21 going, there will be no fixed terms, so no moment of anxiety that might prompt renters to move out if they can’t commit for another year, and landlords will not be able to ask a tenant to leave without a formal Section 8 notice, so these reports should decline as well.”

Rising market rent most common reason for rent increases

The survey also reveals the proportion of renters who had not moved in the past year and were asked to pay higher rent has not increased.

Despite nearly two-thirds (63%) of renters reported being asked for a rent increase. The size of rent increases appears to be falling, with 15% of respondents saying they were charged at least £100 more per month in the 12 months up to September 2025, compared to 22% in October 2024.

The most common reason given by landlords for a rent increase was rising market rents a further 4% attributed rent hikes to advice from letting agents. Generation Rent claim mortgage payments “have never been the main reason for rent increases”, despite evidence that more landlords are struggling to pay their mortgages than ever before.

Despite the Generation Rent survey finding that 27% of private renters did not feel confident asking their landlord to fix something that is the landlord’s responsibility, this means that 73% did feel confident.

A government survey also reveals that the majority of private renters have had a positive experience in the private rented sector, with satisfaction higher for landlords (70%) than for property management agencies (62%).

The full Generation Rent can be viewed by clicking here.

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Rent in advance – why you shouldn’t accept it?

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Rent in advance – why you shouldn’t accept it?

We all know that the prohibition of rent in advance is going to make life really hard for tenants who, for whatever reason, can’t pass normal referencing and until now would have paid rent up front to get the place they want. So it’s natural that people are looking for ways to get around this. I think that’s a really dangerous thing for landlords to get involved in, and in this note, I explain why.

Basically, the Renters’ Rights Act 2025 controls when and how rent can be paid in advance, principally by making amendments to the Tenant Fees Act. (TFA).

For new assured periodic tenancies, the position is broadly as follows.

• Any “pre‑tenancy” rent payment (ie rent paid before the tenancy agreement has been entered into by both parties) is now a prohibited payment under the Tenant Fees Act.
• Landlords and agents must not “invite or encourage” a tenant, guarantor or other “relevant person” to make such a pre‑tenancy rent payment, and must not accept it if it is offered.
• The only lawful pre‑tenancy payments remain the holding deposit and the tenancy deposit, within the existing TFA caps; “initial rent” can only be taken in a short “permitted pre‑tenancy period” once the tenancy has been entered into.
• Any requirement in a new tenancy agreement that the tenant pays rent in advance (for example more than one month at a time, or before the first day of a rental period) is unenforceable.

Existing tenancies in place when the new regime starts can continue to operate on their current advance‑rent arrangements (eg 6‑monthly in advance).

One of the suggested avoidance routes is the payment of a lump sum rent in advance to a third party who will hold it in escrow, which basically means they hold it on trust with an explicit instruction to release it when certain conditions are met.

So the lump sum rent would be paid to an agent or a solicitor, someone like that, with instructions to release it in tranches, usually monthly, as each rent payment date comes up.

But the RRA is drafted with explicit anti‑avoidance language so that a landlord or agent cannot do indirectly, via a third party or escrow arrangement, what they are forbidden to do directly.

The prohibition applies to accepting a prohibited pre‑tenancy rent payment “from a tenant, guarantor or any other relevant person”. I know guidance isn’t supposed to have the force of law but in practice it does and it makes clear that paying rent to a third party (for example, an agent, an associate, or an escrow service) with instructions to release it to the landlord on rent‑due dates will still be treated as a prohibited pre‑tenancy rent payment if the money is rent and is paid before the tenancy is entered into or in excess of the permitted period/amount.

If a lump sum is not clearly rent for identified periods, there is a risk it is characterised as a tenancy deposit; any amount held as security above five weeks’ rent would then breach paragraph 2 of Schedule 1 to the Tenant Fees Act.

In short, routing rent via escrow or a third party before the tenancy is properly in force, or in an amount or timing that is not permitted, is treated as an unlawful attempt to circumvent the statutory restrictions.

As you might expect, given the government’s anti-landlord mindset, there are severe penalties for breach of these rules. Two types of penalty regime interact here: the TFA regime for prohibited payments and the general RRA civil‑penalty framework.

• A prohibited pre‑tenancy rent payment under the TFA can attract a civil penalty from the local authority of up to £5,000 for a first breach, rising to up to £30,000 for a further breach within five years, as an alternative to prosecution. So let’s assume your tenant sets up escrow payments and these start running. At some point you fall out with your tenant and they go to the local authority. If you’ve accepted 6 monthly payments from escrow then that’s you saddled with a £30,000 fine .
• Under the wider RRA enforcement framework, local authorities can impose civil penalties up to £7,000 for first or minor non‑compliance and up to £40,000 for serious or repeat non‑compliance, with the option in serious/repeated cases of criminal prosecution carrying an unlimited fine.
• Tenants and the local authority can also seek a rent repayment order for continuing or repeated breaches where the landlord fails to remedy the breach (for example, by not promptly returning a prohibited rent payment).

Always remember, local authorities now have a statutory duty (not just a power) to enforce “landlord legislation”, and they have a direct financial incentive to find breaches and enforce the payment of penalties because they will keep the cash.

Still fancy trying this way of getting rent in advance payments from tenants?

I don’t.

https://www.gov.uk/government/publications/asking-for-rent-in-advance-guidance-for-local-authorities/asking-for-rent-in-advance-guidance-for-local-authorities

Michael

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Shelter blames rising rents and housing benefit freeze for driving homelessness

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Shelter blames rising rents and housing benefit freeze for driving homelessness

Shelter claims “unaffordable private rents and the freeze on housing benefit” are pushing more people into temporary accommodation.

According to the housing charity, 382,618 people are now homeless, including 350,480 people homeless in temporary accommodation, the highest since records began.

The news comes as the government have pledged to prevent homelessness by the end of this Parliament through its new homelessness strategy.

Newham is the local authority with the highest rate of homelessness in the country

The housing charity claims one in every 153 people in England are now experiencing homelessness, with households spending an average of nearly three years in temporary accommodation.

In the North West, the number of people recorded as homeless has grown by 15% in the last year, and in Yorkshire and the Humber and the West Midlands it has risen by 11%.

Newham is the local authority with the highest rate of homelessness in the country, with 1 in 18 people homeless.

Outside of London, Slough is the worst-affected local authority, with 1 in 43 people homeless, followed by Hastings with 1 in 60 homeless and Manchester and Birmingham, where 1 in every 61 people are homeless.

Unaffordable private rents are pushing more people into homelessness

In a press release, Shelter blames rising rents and the freeze on local housing allowance (LHA) as trapping people in temporary accommodation.

The press release says: “The dire shortage of social homes, unaffordable private rents and the freeze on housing benefit are pushing more people into homelessness and trapping them there.”

Sarah Elliott, chief executive officer at Shelter, is urging the government to unfreeze LHA rates

She said: “It’s unthinkable that as winter sets in, more than 382,000 people are without a safe place to call home. Thousands of people are bracing themselves for their next freezing night on the street, while over 84,000 families are facing up to the grim reality of spending Christmas in damaging temporary accommodation.

“Every day at Shelter, we hear from parents who are terrified of waiting out another winter in appalling temporary accommodation. Cut off from family and friends in a bleak emergency B&B that’s miles away, they watch as their children’s breath hangs in the air and mould climbs the walls.

“We urge the government to help the families who are homeless right now by ending the freeze on housing benefit. This would immediately lift thousands of children out of temporary accommodation and into a home. While we campaign for change, our frontline services will continue providing direct support to those facing homelessness this winter and beyond.”

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Buy-To-Let Mortgages and Personal Guarantees – What You Need to Know

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Buy-To-Let Mortgages and Personal Guarantees – What You Need to Know

Most landlords using limited companies to borrow in 2025 will encounter the requirement to sign a personal guarantee (PG). Even though the borrowing is through a Special Purpose Vehicle (SPV), lenders want additional security that ties directors and shareholders personally to the loan. For landlords, understanding how PGs work – and the risks involved – is vital before signing on the dotted line.

What Is a Personal Guarantee?

A personal guarantee is a legal commitment by an individual to repay a loan if the borrowing company defaults. In practice, this means that even if the property company is the borrower, the lender can pursue the directors or guarantors personally if the company fails to meet obligations.

Personal guarantees usually cover the full amount of the borrowing plus interest and costs. They are a standard feature of almost all limited company buy-to-let mortgages.

Why Do Lenders Require Personal Guarantees?

• Risk mitigation – PGs give lenders an extra safety net beyond the property itself.
• Alignment of interests – lenders want to ensure directors remain personally invested in the success of the venture.
• Regulatory caution – lenders are expected to apply rigorous underwriting to buy-to-let, especially after the PRA rules of 2017.

Without PGs, many lenders would simply refuse to lend to SPVs, which would dramatically reduce financing options for landlords.

Risks for Landlords

By signing a PG, you extend your liability beyond the company structure. Risks include:

• Personal assets at risk – lenders can pursue guarantors’ personal wealth if the company defaults.
• Joint guarantees – where multiple directors sign, liability is often “joint and several”, meaning the lender can pursue one guarantor for the full amount.
• Inheritance implications – PG obligations can pass to estates, complicating succession planning.
• Difficulty exiting – once signed, PGs remain in force until the loan is repaid or refinanced.

Case Study: PG Liability in Practice

Scenario: Two directors borrowed £1m through an SPV. Both signed PGs. When the company defaulted, the lender pursued Director A for the full amount, even though Director B had greater personal wealth.

Outcome: Director A was forced to sell personal assets before later recovering contributions from Director B through legal action. This highlighted the risk of joint and several liability.

Can You Limit PG Exposure?

While most buy-to-let lenders require full PGs, some limited mitigations are possible:

• PG caps – a small number of lenders allow capped guarantees, usually in commercial rather than buy-to-let finance.
• Insurance – specialist PG insurance exists, though premiums can be high and cover is not always comprehensive.
• Negotiation – in rare cases, strong borrowers may negotiate partial PGs, but this is unusual in 2025.

In practice, landlords should assume PGs are unavoidable for SPV borrowing and plan accordingly.

Practical Tips for Landlords

• Always read the PG document carefully and take legal advice before signing.
• Ensure all directors and shareholders understand their obligations under joint and several liability.
• Maintain liquidity buffers to reduce the risk of default.
• Consider life cover written into trust to mitigate the risk of PG liability passing to heirs.
• Factor PG obligations into your wider succession and estate planning.

Final Thoughts

Personal guarantees are a fact of life for most landlords borrowing through limited companies in 2025. They give lenders confidence but increase landlord risk. The best approach is to understand the obligations fully, structure borrowing sensibly, and plan personal finances to manage potential exposure.

Speak to Our Sponsor

Our sponsor helps landlords understand PG obligations, explore insurance options where available, and structure portfolios to minimise personal risk while maintaining borrowing power.

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Publication date: Monday, 29 December 2025

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Why rushed leasehold reform could destabilise the housing market

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Why rushed leasehold reform could destabilise the housing market

Reform of the leasehold system is long overdue. It’s broadly agreed that the current model, with its layers of complexity and its potential for abuse, has required reform for some time. The Leasehold and Freehold Reform Act (LAFRA), which was enacted in a rush under the last government, represents a major step towards fairer ownership structures.

It includes provisions to reduce lease extension and freehold purchase premiums for leaseholders, greater transparency on service charges and accounts as well as enabling more buildings to qualify for the Right to Manage (RTM).

However, save for the RTM changes, many provisions are yet to come into force and may indeed change as we await further legislation. This includes the Leasehold and Commonhold Reform Bill which is expected imminently. We certainly do not want this to be rushed as was the case with LAFRA, which created much uncertainty in the market particularly amongst leaseholders (ironically the very group it seeks to assist).

Politicians’ promises (many of which have been diluted), unimplemented legislation and awaited further legislation has caused ructions throughout the sector that currently underpins over 5 million homes, not only affecting leaseholders and freeholders but also developers, lenders and managing agents.

The value of stability

Leasehold ownership accounts for around 20% of England’s housing stock and in London that figure rises to more than 50%. It encompasses not just privately owned flats but shared ownership homes, retirement developments and mixed-use schemes where complex management structures are essential. This is not a niche tenure but a mainstream form of home ownership which has been embedded in our legal and financial systems for centuries.

For all its faults, the current leasehold system allows leaseholders, subject to qualification, to acquire the freehold of their buildings collectively and take over the management through a no-fault process: something commonhold has yet to achieve at scale. That framework gives lenders confidence, sets out responsibilities for maintenance and provides the mechanism through which large multi-occupancy buildings can function safely. Reforming it requires consideration and continued consultation.

Moreover, it is absolutely agreed that the current regime is riddled with ambiguity and legal jargon, meaning that proper guidance and legal advice is often needed. However, provided leaseholders are fully informed and supported many buildings run well and leaseholders are happy. We must move away from rushed legislation.

Lessons from the LAFRA

The LAFRA itself demonstrates the tension between good intentions and practical reality. The legislation has been appreciated in principle, but many of its provisions remain unimplemented or require secondary legislation to become effective. This has created challenges in the sector for professionals when advising clients. The picture is still blurry.

The Act’s complexity means that conveyancers, valuers and managing agents are already having to navigate a transitional landscape. The risk is that before this new framework has bedded in, further reform could layer uncertainty on top of uncertainty. The next phase must therefore be about consolidation and consultation, not just another wave of change.

Commonhold’s promise and practicalities

The government’s renewed enthusiasm for commonhold is understandable. It promises a simpler, fairer system of ownership in which flat owners control their building collectively rather than holding time-limited leases from an external freeholder. Many practitioners, including members of ALEP, welcome this in principle. Indeed, it is a structure which has worked in many other countries for many years.

However, as ALEP and others have consistently emphasised, commonhold is not yet ready to replace leasehold wholesale. The model requires extensive legal, financial and cultural adaptation. Mortgage lenders remain cautious, developers have little incentive to adopt it, and most managing agents are more familiar with leasehold processes. Without addressing these structural issues, a rapid shift towards commonhold could stall housing delivery and undermine confidence across the market.

Therefore, reform should be evolutionary, not revolutionary. The government must test commonhold in new developments, provide robust guidance for lenders and set realistic timescales for transition. Only through incremental progress can confidence grow organically rather than by imposition.

Reform through collaboration

The solution lies not in halting reform but in managing it responsibly. Government, legal professionals, surveyors, lenders and leaseholders must work together to ensure that the next phase is both fair and functional.

Organisations such as ALEP are well placed to contribute, bringing together practitioners who work within the leasehold system at every stage including valuation, litigation and conveyancing.

A genuinely collaborative process could also help soften the process. Otherwise, leasehold reform risks becoming a ‘them and us’ landscape which is not necessarily healthy or helpful. Leasehold reform has too often been reduced to headlines about exploitation or profiteering, obscuring the reality that most ownership structures function effectively.

By focusing on evidence rather than ideology, policymakers can target the specific problems that remain, such as excessive service charges, opaque management, exploitative leases, without undermining the many developments where leasehold works well.

Avoiding unintended consequences

From a property investment point of view, the financial implications of poorly managed reform, the media frenzy and unnecessary scaremongering in some cases are significant. Uncertainty around valuation, proposed capping of ground rents for valuation purposes, and commonhold are impacting the market. We are yet to see a huge take up from developers to consider commonhold until the landscape is much clearer.

Getting reform right

Leasehold reform is absolutely necessary and welcome. The challenge is to balance ambition with realism. A modern, fair and transparent system is achievable, but only if changes are supported by consultation, education and clear regulation.

Professionals share the government’s desire to make home ownership simpler and fairer, but as was demonstrated at ALEP’s annual conference in October, we believe en masse that effective reform cannot be achieved through haste. The industry must be given the time and clarity to adapt, and leaseholders deserve a system that works in practice as well as in principle.

Reform done well can restore trust and strengthen the market and achieve the growth that the government aspires too. But done badly, reform could destabilise it for years.

Shabnam Ali-Khan is a Partner at Russell-Cooke and a member of ALEP (Association of Leasehold Enfranchisement Practitioners).

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Tenants will be able to challenge landlords over Awaab’s law and could win compensation

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Tenants will be able to challenge landlords over Awaab’s law and could win compensation

The government has warned that all landlords will need to meet Awaab’s Law requirements, as tenants will be able to challenge landlords in court over breaches.

Under the Renters’ Rights Act, Awaab’s Law will be extended to the private rented sector (PRS), where landlords will have to fix damp and mould within strict timeframes.

Awaab’s Law has already taken effect for social housing landlords, but the government says it understands the differences between social housing and the PRS and will apply the law in a way that is “fair, proportionate and effective” for landlords and tenants.

The government has not yet confirmed a date for implementation, but Awaab’s Law is expected to come into force during phase three of the Act, in 2027.

If landlords fail to comply, tenants will be able to challenge them

According to the Renters’ Rights Act guidance, landlords will need to meet strict timeframes to deal with damp and mould.

The government guidance says tenants will be able to challenge landlords for breaches and even gain compensation.

The guidance says: “In line with the approach taken for social housing, Awaab’s Law will imply terms into private rented sector tenancy agreements. This means all private landlords will have to meet Awaab’s Law requirements, for example, on timescales for dealing with hazards such as damp and mould, when these are set out in regulations.

“If landlords fail to comply, tenants will be able to challenge them through the court for breach of contract. If the court finds the landlord in breach, they will be able to order the landlord to take appropriate action and/or pay compensation.

“Seeking redress through the courts is not the only way that residents can challenge their landlords for breaches of Awaab’s Law. Tenants may wish to complain to their landlord and, if they are not satisfied with the response, this could then be escalated to the new Private Rented Sector Landlord Ombudsman.”

We recognise that there are differences between the private and social rented sectors

Whilst the government has not yet set out what these timeframes will be for the PRS, for social housing all emergency hazards need to be fixed within 24 hours and any potential significant hazards must be investigated within 10 working days of becoming aware of them.

Under Awaab’s law, social housing landlords must cover the cost of alternative accommodation for tenants if the property cannot be made safe within a specific timeframe.

The government claim they understand there’s a difference between the PRS and social housing sector and will work with private landlords and tenants.

The government guidance says: “Everyone deserves a home that is safe, decent and secure, so it is only right that Awaab’s Law protections should be in place for renters regardless of whether their homes are privately or socially rented.

“We recognise that there are differences between the private and social rented sectors. We will carefully consider how best to apply Awaab’s Law to the private rented sector in a way that is fair, proportionate and effective for both tenants and landlords, and will consult on this. We will set out further detail on our plans in due course.”

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Is Section 21 valid if the EPC was served late but before notice?

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Is Section 21 valid if the EPC was served late but before notice?

Hi, I’ve served a Section 21 notice on a tenant and I’m getting conflicting advice regarding the EPC validity and when it should be served on the tenant to validate a Section 21.

The AST began six years ago. I didn’t have or serve a valid EPC at the time. I commissioned and served/shared with the tenant a valid EPC in January 2025. I served a Section 21 in September 2025.

Even though I served a valid EPC prior to serving the Section 21, I didn’t have or serve a valid EPC at the beginning of the AST. Does this invalidate the Section 21?

Any advice would be appreciated.

Thanks,

PK

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Interest rates fall to 3.75% as Bank of England eases borrowing pressure

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Interest rates fall to 3.75% as Bank of England eases borrowing pressure

The Bank of England has reduced its base rate from 4% to 3.75%, cutting borrowing costs to their lowest level since February 2023.

The decision had been widely anticipated after recent data pointed to a cooling economy.

Markets had already priced in a move, with analysts expecting policymakers to act following a run of softer figures.

Inflation came in lower than forecast at 3.2%, wage growth showed signs of easing and broader activity has slowed.

The base rate acts as a benchmark for banks and lenders, shaping what households and businesses pay on mortgages, credit cards and loans.

Five voted for rate cut

Five members of the Bank’s nine-member Monetary Policy Committee voted for a rate cut, while four wanted to hold it at 4%.

The Bank’s governor Andrew Bailey, said: “We still think rates are on a gradual path downward but with every cut we make, how much further we go becomes a closer call.”

The chancellor Rachel Reeves has welcomed the news of the pre-Christmas rate cut.

She said: “This is the sixth interest rate cut since the election – that’s the fastest pace of cuts in 17 years, good news for families with mortgages and businesses with loans.”

Industry reaction to base rate cut

Steve Cox, Chief Commercial Officer at buy-to-let lender, Fleet Mortgages: “The Bank’s decision to cut Bank Base Rate today will come as little surprise given recent market sentiment and the broader economic signals pointing in this direction. In many ways, a number of lenders have been ahead of this particular curve having been actively pricing it into products.

“We’ve seen a flurry of mortgage rate cuts across the residential and buy-to-let sectors over the last week or so perhaps in anticipation of this decision and in an attempt to grow volume and pipeline as we move into 2026. In the buy-to-let space, product pricing continues to improve, supported not just by this rate change, but by swaps which are increasingly aligned with the view that further cuts could follow into 2026.

“For landlords, this is a positive way to end the year, and a promising start to 2026. With greater certainty following the Autumn Statement – including clarity on tax changes that won’t bite until April 2027 and with the Renters’ Rights Act coming into force next year, any opportunity to reduce monthly mortgage costs will be welcomed.

“Landlords coming to the end of two-year deals in particular will find a much more competitive rate environment than they did in 2023 or early 2024, and this should support renewed purchase and refinance activity in the months ahead.”

Festive cheer for borrowers

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “A cut in base rate was a dead cert after the recent inflation figures, which while still above the Bank’s 2 per cent target, are moving in the right direction.

“This news will add to the festive cheer borrowers are already experiencing with lenders cutting mortgage rates, keen to attract business and get 2026 off to a strong start.

“With some lenders repricing on a weekly basis, it is now possible to access a short-term fix at just over 3.5 per cent. Given how relatively quiet activity is with the usual pre-Christmas lull, we would expect to see rates dip below that level in late December or early January. It might take a little longer for five-year fixes to breach the 3.5 per cent barrier but it could happen in the new year, with rates currently at just over 3.7 per cent.

For next year Mr Harris predicts further base rate cut: “Market expectations are for another two or three base rate reductions in the new year. This will provide a welcome shot in the arm for the housing market now which suffered from pre-Budget speculation over property taxes which on the whole were not as bad as many feared.

“Those remortgaging in the next few months have a free throw of the dice as rates can be booked up to six months before you need them. You can book a rate now and review prior to completion, if rates have fallen by then, you can enquire about switching to lower rate. If not, you can keep what you have.”

Sprinkle of good news

Nick Leeming, Chairman of Jackson-Stops, comments: “Today’s news is a shot in the arm for the housing market just as we enter peak property browsing season over the Christmas break. Lower borrowing costs is a key driver of renewed buyer confidence. Unlocking more competitive pricing should lower monthly repayments for homeowners on variable or tracker mortgages, improve affordability at the low to mid end, and stimulate buyer activity.

“We expect to see a gradual increase in buyer enquiries, improved sentiment, and a more balanced market, with the potential to encourage discretionary movers and international buyers back into the market. While broader economic factors such as employment trends and wage growth still influence buyer behaviour, ultimately lower borrowing costs will make moving home more financially feasible.

“The sprinkle of good news for the housing market has come at a much-needed time after a market freeze in the run up to the Budget. Whilst the consequences of the resulting mansion tax have yet to be determined, many are now breathing a sigh of relief with certainty in the air and added economic confidence from falling interest rates. The resilience of the housing market over the past few months points to an expected period of long-term stability.”

Extremely positive

Nathan Emerson, CEO of Propertymark, comments: “As we round the year off, it is extremely positive to see the Bank of England in a position where it has the confidence to make what is now a fourth base rate cut within twelve months.

“Although mortgage agreements vary, today’s news could typically represent a saving of around £150 each month for those currently on a tracker mortgage, or for those considering a new mortgage deal, when compared to the start of 2025.

“This, coupled with the fact that we have also witnessed the rate of inflation dip further only yesterday, should help create a strong platform for consumer confidence and affordability as we progress into the new year. In addition, there is real potential for lenders to support first-time buyers with more focused products to help uplift the market over the coming weeks and months.”

Boost for the property and mortgage markets

Kris Brewster, Retail Director at LHV Bank said: “As CPI inflation dropped to a lower than expected 3.2% yesterday, the lowest number for eight years, this opened the door for the MPC to vote in favour of a cut to 3.75%.

“This will be a boost for the property and mortgage markets before the start of a new year as loans potentially become more affordable, but savers face a bigger battle to protect their incomes and spending power in the face of frozen income tax thresholds and the higher cost of living overall.

“To beat sticky inflation, consumers must protect their cash by shopping around ready to switch to current account rates delivering inflation beating rates, rewarding customers for their loyalty in a market that so often returns so little on day-to-day money. With Moneyfacts data suggesting one in four savers have never switched accounts, consumers must get out of their comfort zone to beat the downward trajectory of Base Rates predicted over 2026 and lock in higher returns with a top ranked provider now.”

Cut is not a great surprise

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “This cut is not a great surprise given the news that has come out this week which isn’t all good for the economy.

“The encouraging news is that the housing market has been relatively resilient despite many concerns about the contents of the Budget, which turned out not to be as bad as anticipated. We don’t expect fireworks after the new year but now interest rates are a little lower, we do expect a gradual improvement with property price increases tempered by continuing concerns about the economy and the amount of choice available.

“Many of our customers have been sitting on their hands, not knowing which way to turn but they haven’t withdrawn from the market altogether. Many are now saying since the Budget – ‘why not?’ rather than ‘why?’, which is what they were saying previously.”

Bank Rate cut headlines are always positive for home-mover sentiment

Matt Smith, Rightmove’s mortgages expert says: “The financial markets and mortgage lenders have been expecting today’s Bank Rate cut for a while, and therefore responded early with mortgage rate cuts in December to round off the year. Bank Rate cut headlines are always positive for home-mover sentiment, even if this one has already been baked into mortgage rate cuts and won’t drive further drops.

“However, what will have more of an impact on the future direction of mortgage rates is the better than expected inflation figure reported earlier this week, which has improved the market’s forecast for next year.

“Don’t expect any big rate drops before Christmas while the property market is quieter, but it does mean we could now see a fresh round of rate cuts in the new year as lenders look to start the new year with a bang. Home-movers are likely to see the most notable rate drops for two-year fixed products rather than five, and next year we expect the gap between two-year and five-year deals to grow.”

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