On 1 May 2026, Phase 1 of the UK Renters’ Rights Act came into force — the most sweeping reform of England’s private rental sector in decades. For Taiwanese, Hong Kong, and overseas investors holding London property, this is more than a regulatory update: it requires an immediate operational adjustment. This guide by IREIS Properties has been written specifically for overseas landlords who need a clear, practical breakdown of what has changed, what it means for your investment, and what steps to take right now.
KEY POINTS
Section 21 ‘no-fault’ evictions are abolished — all possession claims must now use Section 8 with a valid legal ground
All tenancies have automatically converted to periodic (rolling) contracts — tenants can leave with 2 months’ notice at any time
Rent increases are limited to once per year via a formal Section 13 notice with 2 months’ minimum warning
Landlords with existing tenancies had until 31 May 2026 to issue tenants the Government Information Sheet or risk a fine of up to £7,000
Four Core Phase 1 Changes
Section 21 Abolished
From 1 May 2026, no new Section 21 notices are valid. All possession actions must be pursued via Section 8 with a specified statutory ground. Courts will not accept Section 21 claims issued after this date.
Periodic Tenancies
All fixed-term Assured Shorthold Tenancies have automatically converted to rolling periodic tenancies. Landlords can no longer rely on a fixed end date as grounds for a tenant to leave.
Rent Increase Controls
Increases limited to once per year via a formal Section 13 notice with at least 2 months’ advance notice. Rental bidding above the advertised price is banned. Maximum 1 month’s rent in advance.
PRS Landlord Database
Phase 2 (expected late 2026) will introduce a mandatory landlord registration database. Overseas landlords must register personally — this cannot be done by a letting agent on your behalf.
Background and Why This Matters
The Renters’ Rights Act received Royal Assent on 27 October 2025. It applies to England’s private rented sector (PRS) only — it does not apply in Wales, Scotland, or Northern Ireland. Its primary purpose is to abolish ‘no-fault’ evictions, introduce greater security of tenure for tenants, and regulate rental practices that the government considered exploitative.
For overseas investors — particularly Taiwanese buyers who have purchased London property for their children’s education or as a long-term rental asset — this reform does not remove landlord rights. It changes how those rights are exercised. The key mindset shift: you can no longer rely on lease expiry or a simple Section 21 notice as a fallback exit. Every action to recover possession must now be evidence-based and procedurally correct.
This applies equally whether you hold property in your personal name or through a UK limited company. IREIS Properties recommends that all overseas landlords currently holding tenanted property should verify compliance with a licensed property manager as a matter of priority — especially if you have an existing tenancy that was live on 1 May 2026.
Phase 1: Seven Changes in Force from 1 May 2026
1. Section 21 Abolished
This is the most fundamental change. No new Section 21 notices are valid from 1 May 2026. Courts will not accept possession claims based on Section 21 served after this date. Any Section 21 notices served before 1 May 2026 that remain within their validity period may still be pursued — consult a solicitor on your specific situation.
2. All Tenancies Become Periodic
All fixed-term Assured Shorthold Tenancies (ASTs) have automatically converted to rolling periodic tenancies. Tenants can give 2 months’ written notice to leave at any time, without waiting for a fixed end date. Landlords must plan for more variable void periods as a result.
3. Rental Bidding Banned
Landlords and letting agents cannot accept offers above the advertised rental price. Advance rent is capped at one month. These provisions are designed to prevent rental market inflation driven by competitive bidding.
4. Rent Increases — Section 13 Only
Rents can only be increased once per year, and only via a formal Section 13 notice served at least 2 months in advance. There is no statutory cap on the amount of increase, but tenants can challenge increases they consider unreasonable at the First-tier Tribunal, which will assess market comparables.
5. Anti-Discrimination Provisions
Landlords and agents cannot refuse tenants solely because they have children or receive housing benefit. Breaches are subject to civil penalties.
6. Pet Ownership
Landlords cannot unreasonably refuse a tenant’s request to keep a pet. Landlords may require tenants to take out pet damage insurance as a condition of consent.
7. Government Information Sheet — Urgent for Existing Tenancies
Landlords with tenancies that were live on 1 May 2026 were required to issue tenants the official Government Information Sheet by 31 May 2026. Failure carries a civil penalty of up to £7,000 per tenancy. The document is available from GOV.UK. If you missed this deadline, seek legal advice and issue the document without further delay.
How to Legally Recover Possession
With Section 21 gone, landlords must use Section 8 and cite a specific statutory ground. Grounds are either Mandatory (court must grant possession if criteria are met) or Discretionary (court may grant possession). The following are most relevant for overseas investors:
Ground 1A — Landlord Intends to Sell (New Mandatory Ground)
This is a newly created ground added specifically to balance landlord exit rights with tenant security. Requirements: the tenancy must have been in place for at least 12 months before the notice date; the landlord must serve 4 months’ written notice; after recovering possession, the property cannot be re-let or used for short-term letting (e.g. Airbnb) for 12 months. This is the primary route for overseas investors who need to liquidate their asset.
Ground 1 — Owner or Family Member to Occupy (Mandatory)
If the landlord or a close family member intends to occupy the property as their principal home, 4 months’ notice is required. The tenancy must also have been running for at least 12 months.
Ground 8 — Serious Rent Arrears (Mandatory)
Where a tenant has accumulated rent arrears of at least 3 months, the court must grant possession under this mandatory ground. This remains one of the strongest protections available to landlords.
Ground 6 — Demolition or Substantial Redevelopment (Discretionary)
The landlord intends to carry out works so substantial that the tenant cannot remain in occupation during the works. Evidence of genuine redevelopment plans is required.
Critical: all Section 8 applications require full procedural compliance. A valid Gas Safety Certificate, an Energy Performance Certificate (EPC), registered Deposit Protection, and a correctly served How to Rent guide must all be in order before a court will accept a possession claim. IREIS Properties can connect overseas landlords with ARLA-accredited London management companies who handle all compliance documentation as part of their service.
“The abolition of Section 21 does not remove landlord rights — it removes an unstructured shortcut. Landlords who maintain proper documentation and use professional management can navigate this new framework without difficulty.”
Rent Management and Tax Considerations
Using Section 13 Correctly
Section 13 notices are the sole mechanism for rent increases. Use the prescribed government form, give a minimum of 2 months’ notice, and apply increases no more than once per 12 months. The notice must specify the new rental amount and the date it takes effect. If a tenant disputes the increase, they may refer it to the First-tier Tribunal before the increase date takes effect. The Tribunal will assess comparable market rents in determining a fair amount.
Mortgage Interest and Section 24
A common misconception among overseas individual landlords is that mortgage interest can be fully deducted as an expense. Since tax year 2020/21, individual landlords in England can no longer deduct mortgage interest from rental income. Instead, a 20% basic rate tax credit applies. For higher rate (40%) or additional rate (45%) taxpayers, this represents a significantly reduced tax benefit compared to the pre-2017 rules. Landlords holding property through a UK limited company may still deduct mortgage interest in full against company profits, subject to corporation tax. We recommend consulting a qualified UK tax adviser to assess the most appropriate holding structure for your circumstances.
Capital Gains Tax (CGT) Planning
Non-UK residents disposing of UK residential property are subject to CGT on any gain. Rates vary by taxable income band and tax year. CGT rates are subject to change, and we recommend consulting a qualified UK tax adviser to confirm current rates for the 2026/27 tax year and any available reliefs or exemptions before proceeding with a sale.
Four Action Points for Overseas Landlords
1. Verify Compliance on Existing Tenancies
If your property had a live tenancy on 1 May 2026: confirm whether you issued the Government Information Sheet by the 31 May deadline; review whether any clause in your tenancy agreement now conflicts with the new law (e.g. anti-discrimination provisions or rent advance clauses). Contact your property manager or solicitor immediately if there is any doubt.
2. Engage a Licensed Property Manager
The Renters’ Rights Act significantly increases the compliance burden of self-management. A licensed London letting agent (ARLA Propertymark member) will manage Section 8 documentation, annual Gas Safety Certificate renewals, EPC compliance, and deposit registration as standard. IREIS Properties can help Taiwanese and overseas clients identify a trusted local management firm that understands the requirements for non-resident landlords.
3. Plan Possession or Sale Timelines in Advance
If you anticipate needing to recover your property within the next 12–24 months, assess now whether Ground 1A (sale) or Ground 1 (owner-occupation) applies. Factor in the mandatory 12-month minimum tenancy and 4-month notice period. Early planning avoids timeline conflicts that would delay your exit strategy.
4. Prepare for Phase 2 — Landlord Database Registration
The PRS Landlord Database is expected in late 2026. Registration must be completed by the landlord personally and cannot be delegated to a letting agent. IREIS Properties will provide step-by-step guidance for overseas clients when the registration portal opens.
Frequently Asked Questions
Q: Section 21 is gone — can I still get my property back if I want to sell?
Yes. Use Section 8 Ground 1A (Landlord Intends to Sell). The tenancy must have been running for at least 12 months, and you must serve 4 months’ written notice. After recovering possession, the property cannot be re-let for 12 months. We recommend instructing a solicitor to ensure your notice and documentation are in order before filing a possession claim.
Q: Do I need to sign a new tenancy agreement with my tenant?
No. The conversion to periodic tenancy happens automatically by law. However, you were required to issue the Government Information Sheet to all existing tenants by 31 May 2026. If you have not yet done so, issue it immediately and seek legal advice on the penalty exposure. The document is freely available from GOV.UK.
Q: Is there a cap on how much I can increase rent?
There is no statutory percentage cap on rent increases under the Renters’ Rights Act. You can increase rents in line with the market using a valid Section 13 notice (once per year, 2 months’ notice). However, tenants can challenge increases at the First-tier Tribunal, which will assess local market comparables. We recommend benchmarking any increase against comparable lettings in your postcode.
Q: How much stamp duty will I pay when buying a London investment property?
Stamp Duty Land Tax (SDLT) for overseas buyers purchasing an additional residential property involves multiple rate bands and surcharges. Rather than risk an inaccurate estimate, IREIS Properties recommends using our dedicated calculator for a precise figure based on your residency status and existing property ownership.
To calculate your exact Stamp Duty liability on a UK property purchase, use our → IREIS UK Stamp Duty Calculator (accounts for overseas buyer surcharge and additional dwelling supplement).
IREIS PROPERTIES
Is your London property compliant under the Renters’ Rights Act? Our trilingual London-based advisory team offers a free consultation to help you assess your position and build a clear action plan.