It's all change for landlords in 2026: Here's what they need to look out for
SOURCE:Daily Mail
From the seismic Renters Rights Act to new energy rules and potentially falling rents, here is what buy-to-let landlords will be contending with this year.
Landlords face quite a year in 2026.
The Renters' Rights Act, which comes into force on 1 May, will give tenants the greatest increase to their rights in a generation - with landlords facing fines of up to £40,000 if they fall foul of the new rules.
Landlords also face a major tax shake-up that is set to overhaul how they report their income and expenses to His Majesty's Revenue & Customs.
They will also be hoping to learn more about the Government's plan to force them to make their properties greener, under energy and climate secretary Ed Miliband - rules which may require costly upgrades of older homes.
On top of all that, those looking to raise rents may also be disappointed, as demand from tenants slides for the first time in several years.
We look at the big issues landlords will have to contend with this year.
More regulations: Landlords will have to adapt to new rules under the Renters' Rights Act in 2026, including stricter policies on evictions and rent rises
Sweeping changes under Renters' Rights Act
By far the biggest change facing landlords in 2026 will be the implementation of the Renters' Rights Act.
From 1 May, almost 40 years of legislation underpinning the private rental sector will change overnight.
It will ban 'no-fault' evictions and force landlords to give a proper reason for telling tenants to leave, for example wanting to sell the property or move back in themselves. Wanting to put up the rent is not good enough.
For their part, tenants will get the right to end tenancies at any time, as long as they give two months' notice. Fixed-term tenancies will be abolished.
It will also give renters better rights to challenge poor conditions and unreasonable rent increases without fear of retaliatory eviction.
Bidding wars will be ended with landlords unable to accept more than the asking rent, and it will also ban landlords from demanding more than one month's rent upfront.
The act will also ban landlords and agents from refusing renters because they have children or receive benefits. Renters will also be able to ask to keep a pet - something landlords can't say no to without a good reason.
'You can still issue a claim for possession based on a section 21 notice provided that you've issued a valid notice before the May deadline.
She adds: 'Landlords also need to remember that there could be delays in serving a valid notice if additional steps need to be taken before a valid section 21 notice can be served, for example an annual gas certificate has not been provided to the tenant.
'Once the notice is served, landlords need to keep an eye out for May and remember that the deadline for requesting the court to issue proceedings might be shorter than the usual six-month window.'
Ben Beadle, chief executive of the National Residential Landlords Association believes the changes are coming too soon.
He says the regulations needed to update all tenancy agreements in England will not be published until January, giving the buy-to-let sector just four months to prepare.
'That effectively gives just four months to inform over 11 million tenants in England about changes to their tenancy agreements alongside all the work needed to ensure landlords, letting agents, councils and the courts are ready for the impact of the Act,' Beadle said.
More admin thanks to Making Tax Digital
April will bring major changes landlords in the way that many landlords report their income and spending to HMRC.
From 6 April, those earning over £50,000 from self-employment or property income will need to start making quarterly submissions to the taxman. The first filing will be due on 7 August.
This is part of HMRC's shift towards digital record-keeping - what it is calling Making Tax Digital for income tax.
The move is expected to affect approximately 780,000 people in its first wave, with another 970,000 to follow from April 2027 and further expansion in 2028.
The first group affected includes sole traders and landlords with gross income over £50,000.
Those earning between £30,000 and £50,000 will follow in April 2027, with further expansion to those earning £20,000 or more from 2028.
The income threshold is based on gross income, not profits, which means even those making modest earnings after expenses could still be caught by the new rules.
The new reporting regime will add further costs, and administrative burdens for buy-to-let landlords, according to Heather Powell, head of property at tax advisors, Blick Rothenberg.
'Filings will only be possible via commercial software that a landlord has to purchase, or their accountant,' she says.
'The returns for buy to let investors, particularly those with less than three properties, are going to be significantly impacted by this new regime. It is likely to be the final nail in the coffin for many.'
'Investors, especially those who purchased a buy to let property to supplement their pension may feel that the administrative burdens now associated with the investment and reduced profits, make it the right time to sell up.'
Around a quarter of landlords said they were not at all, or not really, aware of the changes to come, according to an NRLA study.
That is despite 67 per cent of landlords saying they expect the rules to affect them by 2028.
Shake-up: New HMRC rules could catch out thousands of landlords who aren't ready for having to report their income and expenses on a quarterly basis
Stricter energy efficiency rules on the way
Changes to Energy Performance Certificate requirements have been hanging over the sector for a number of years now.
The EPC is a rating scheme which bands properties between A and G, with an A rating being the most energy efficient and G the least efficient.
At present, landlords need to ensure their property has a minimum energy performance certificate rating of E in order to let it, unless they are exempt because they own a period property.
EPC certificates are valid for 10 years and all landlords must provide a copy to tenants before they move in.
Failure to do so can lead to large fines and stop a landlord from being able to let their property in future.
Energy secretary Ed Miliband announced earlier this year that all privately rented properties must have a rating of C by 2030.
A consultation was launched on the plans and closed in May 2025, but the Government has not yet issued its response.
As of yet, there is no clarity about when this might be, but it is likely to be some time next year.
It is estimated that 2.6 million privately rented homes are EPC D or below, according to the Ministry of Housing, Communities and Local Government. That equates to 60 per cent of rented homes.
'The delay in responding to the consultation is making what was already tight proposed deadlines to meet the proposed energy efficiency standards for the sector all but impossible to meet, not least given the chronic shortage of tradespeople to undertake the necessary work,' said the NRLA's Beadle.
He also thinks landlords need more financial support to make the eco upgrades, which can be costly.
He added: 'The Government's proposals would require landlords to invest up to £15,000 per property to meet new energy efficiency standards.
'However, polling by independent research consultancy Pegasus for the NRLA has found that, on average, £7,700 worth of investment is the threshold beyond which meeting the Government's targets becomes unaffordable for landlords.
'To support the work required, energy efficiency investments should be be made deductible against income tax.'
Eco rules: At present, landlords need to ensure their property has a minimum EPC rating of E but this is likely to be raised to a C
It will be harder to raise rents
In recent years it seemed that the only way was up for rents with too few properties available and too many renters competing over them.
But the market seems to have calmed down with rents in some locations now falling.
While the average UK rent has risen 2.3 per cent over the last 12 months to £1,337, according to the HomeLet rental index, rents fell 0.6 per cent in the month of November - the last for which data is available.
Those in the East Midlands and North East will have seen rents rise 4.8 per cent and 4.1 per cent over the year, on average.
Meanwhile, the typical home in the South East is fetching 1.1 per cent less than a year ago.
Looking ahead, the rental demand and supply imbalance of recent years seems to be reversing at quite a pace and this could lead rents to fall in some areas.
The average number of homes being put up for rent each month rose from 99,739 in 2024 to 108,348 per month in 2025, according to the estate agent membership body Propertymark.
It says the rent agreed by tenants also fell from £1,511 a month in 2024 to £1,505 a month in 2025.
The number of tenants seeking a home has fallen by 20 per cent over the last year, it says, while the number of homes available to let has risen by 15 per cent.
More choice for renters: Demand for rented homes has fallen by a fifth over the last year and is the lowest for six years. There are also 15% more homes for rent than last year
The drop in demand reflects two main factors, according to Zoopla. First, a sharp decline in net migration, which Office for National Statistics estimates say has fallen by 78 per cent between June 2023 and June 2025.
This has boosted demand to buy homes and removed some would-be tenants from the rental market, Zoopla said.
Zoopla says the market is on track for 20 per cent more first time buyers purchasing homes over 2025, than the previous year.
The property firm Savills, expects rental demand levels to fall back in line with the more normal market conditions of the 2010s.
Over the next five years, Savills expects rental growth to align between the rates of CPI inflation and household income growth.
CPI inflation is at 3.2 per cent in the 12 months to November and the Office for Budget Responsibility is forecasting this will average around 2.5 per cent next year and then 2 per cent in 2027.
Meanwhile average earnings rose 4.8 per cent over the last year, according to the latest ONS data.
'As it stands, the main risk to our forecast is the potential for another surge in net migration, or a major supply shock on a similar scale,' said Emily Williams, director of research at Savills.
'So far, the outflow of landlords from the private sector has been gradual, however, now that the Renters' Rights Act is law, it is vital that being a landlord remains profitable and appealing.
'If investment into the sector shrinks further, we could see a supply-side shock to match the demand surge that has already made renting so difficult in recent years.'
More landlords will set up in companies
The dramatic increase in buy-to-let properties held in limited companies seen over the last decade has been driven by younger, newer landlords buying property within a company structure from the outset, according to research by Paragon Bank.
Holding property in a limited company, also known as 'incorporating', is an alternative to holding property in one's personal name.
It can come with various tax advantages, including the fact that corporation tax - payable in a company structure - is lower than income tax, which is payable for landlords who own properties in their own name.
This allows landlords to build up profit within the company, which they can use it to re-invest towards another property sooner than they might otherwise have done if owning in their own name.
Paragon found that nearly one in three hold their properties exclusively via a limited company structure, with another 36 per cent splitting ownership between corporate entities and personal names.
It says that two‑thirds of landlords have created at least one company for their buy-to-let investments.
Paragon says that amongst landlords aged 25-34, 57 per cent of properties are held in limited companies, while 43 per cent are owned through a mix of corporate and personal names.
The mortgage lender says that seven out of 10 landlords planning to purchase a new buy-to-let property will utilise a limited company structure.
'In a bid to mitigate the impact of tax changes introduced in the latter half of the previous decade, the last 10 years has seen more and more landlords opt to hold their buy-to-let properties in limited companies,' said Louisa Sedgwick, managing director of mortgages at Paragon Bank.
'Interestingly, our research shows that younger and newer landlords are more likely to structure their portfolios this way and do so earlier on in their landlord careers.'
Aneisha Beveridge, head of research at estate agent Hamptons also expects landlords to increasingly turn towards the company structure in the years ahead.
'Despite the challenges, investment hasn't stopped – it's increasingly concentrated among larger portfolio landlords who are targeting higher-yielding homes in the North of England to make the numbers work,' said Beveridge.
'At the same time, many are restructuring to shelter from a punitive tax environment, with limited company incorporations on track for another record year in 2025.
'This shift, alongside preparations for Making Tax Digital, shows landlords aren't planning to exit – they're adapting for the future.'
Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible.
Buy-to-let landlords should also act as soon as they can.
Quick mortgage finder links with This is Money's partner L&C
Borrowers should compare rates, speak to a mortgage broker and be prepared to act.
Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.
Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.
Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone.
What if I am buying a home?
Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.
Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power.
What about buy-to-let landlords?
Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages.
This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a broker.
This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice.
If you’re ready to find your next mortgage, why not use L&C’s online Mortgage Finder. It will search 1,000’s of deals from more than 90 different lenders to discover the best deal for you.
Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage