Section 21 Abolished: What Landlords Need To Do Now

Section 21 abolished. Two words that changed the private rented sector more than anything since 1988. Most of the Renters’ Rights Act took effect on 1 May 2026, and enough time has now passed to look at what actually changed rather than what was predicted.

We wrote about the Act before implementation. This is the follow-up.

What Changed When Section 21 Abolished No-Fault Evictions

No new Section 21 notices can be served. With Section 21 abolished, possession runs through a Section 8 notice citing one or more legal grounds. Serving a Section 21 now is not merely invalid, it can attract a civil penalty from the local authority.

Fixed terms have ended. Assured shorthold tenancies converted automatically to assured periodic tenancies, including existing ones. You cannot let on a fixed term, and telling a tenant they are in one can be penalised.

Rent increases go through Section 13. That is the only route now, once a year.

Rent in advance is capped. No more than one month’s rent at a time, and none before the tenancy is signed.

Bidding wars are banned. Adverts must state a rent, and you cannot accept or encourage offers above it.

Discrimination rules apply. You cannot refuse tenants because they have children or receive benefits.

Tenants can request a pet, and you cannot unreasonably refuse.

One transitional point caught people out: since 1 August, notices served before the Act came into force can no longer be used to apply for a possession order.

What Is Still Coming

The Act is phased. The landlord database and the private rented sector ombudsman are both still to be implemented, along with further measures on standards. The NRLA’s guidance is the best place to track the detail, and GOV.UK publishes the official material.

What Section 21 Abolished Means for Your Finances

We are mortgage brokers rather than letting agents, so the useful part for us is what this does to your numbers.

Void periods carry more risk. Now Section 21 is abolished, possession runs through Section 8 grounds and the courts, which takes longer and costs more. If your rental income covers your mortgage with little margin, that margin matters more than it did. Landlord possession claims have been running near 29,000 over the past year.

Cash flow buffers are no longer optional. The gap between a tenant stopping payment and you regaining possession has widened. Buy-to-let arrears are actually falling, down 6% in the second quarter of 2026 and now around 0.44% of outstanding buy-to-let mortgages, but that is the average rather than your worst case.

The April 2027 tax change is confirmed. Property income tax rates rise by two percentage points across basic, higher and additional rates. This affects landlords holding property personally, not limited companies. Being dated and confirmed, it is more useful to plan around than Budget speculation.

Product flexibility matters more. With more moving parts, whether you can overpay, how long you are tied in and what happens if you need to sell all deserve weight alongside the headline rate.

Should You Restructure?

The question we get most is whether to move properties into a limited company, given corporate landlords avoid the April 2027 rise and were unaffected by earlier interest relief restrictions.

The honest answer is that it depends entirely on your circumstances. Moving property into a company is a sale for tax purposes, which can trigger capital gains tax and stamp duty. For some landlords the long-term saving outweighs that. For many it does not.

What we can do is show you the mortgage side either way, including current limited company buy-to-let rates and criteria. The tax side needs your accountant. Our post on structuring a buy-to-let portfolio covers the wider considerations.

Is Buy-to-Let Still Worth It Now Section 21 Is Abolished?

Plenty of landlords have asked, and some have sold.

The case for staying: rents are at record levels, arrears and possessions are falling, and yields in parts of the North remain strong even as southern capital growth has stalled. The case for leaving: regulation, tax and borrowing costs have all moved against individual landlords over the last decade, and the Act adds operational complexity.

It is a portfolio-by-portfolio question rather than a market-wide one. A well-yielding property in a strong rental area at a sensible loan-to-value is a different proposition from a low-yielding southern flat with a large mortgage and a service charge.

Let Us Look at Your Numbers

If you are reviewing your portfolio, approaching a remortgage, or weighing up whether to expand or exit, get a clear view of the mortgage side first.

Get in touch and we will look at what is available across the whole market for your set-up, including limited company options if that is a direction you are considering.

Frequently Asked Questions

When was Section 21 abolished?

Section 21 was abolished on 1 May 2026, when most of the Renters’ Rights Act came into force. The last day a valid Section 21 notice could be served was 30 April 2026.

Can landlords still use Section 21 notices?

No. With Section 21 abolished, no new notices can be served, and since 1 August 2026 notices served before the Act came into force can no longer be used to apply for possession.

What replaced Section 21?

Possession now runs through Section 8 notices citing specific legal grounds, several of which were revised or newly introduced by the Act.

Are fixed-term tenancies still allowed?

No. Assured tenancies are now periodic, applied automatically to existing tenancies. Letting on a fixed term can attract a civil penalty.

How much rent in advance can a landlord ask for?

No more than one month at a time, and rent cannot be taken before the tenancy is signed.

Are landlord taxes going up?

Yes. Property income tax rates rise by two percentage points from April 2027 for landlords holding property personally. Limited companies are unaffected by that change.

Compliance note: stays on the finance side and signposts NRLA and GOV.UK for legal detail, so we are not straying into legal advice. Verify the phased implementation status of the landlord database and ombudsman immediately before publishing, as these dates have moved before. Also confirm the GOV.UK collection URL resolves.