BLOGS

Introduction

The private rented sector in England is undergoing its most significant regulatory overhaul since the Housing Act 1988. The Renters' Rights Act 2025, which received Royal Assent in October 2025, abolishes Section 21 "no fault" evictions, introduces mandatory landlord registration, and extends the Decent Homes Standard to privately rented properties for the first time.

Central to these reforms is a strengthened enforcement regime. From 27 December 2025, local housing authorities gained expanded investigatory powers to demand documents, enter premises, and pursue civil penalties of up to £40,000 for serious offences. To support this, the Government announced £18.2 million in "new burdens" funding for councils in 2025/26.

But a fundamental question hangs over the legislation: do councils have the capacity to enforce it?

The enforcement gap: a track record of under-prosecution

The scale of the challenge is stark. According to analysis by The Guardian, two-thirds of councils in England have not prosecuted a single landlord in the past three years—despite receiving roughly 300,000 complaints from tenants living in unsafe or unfit homes. This enforcement deficit is not a matter of lax standards; it reflects years of budget cuts to local authority housing teams.

Research by the National Residential Landlords Association (NRLA) underscores the problem. Of a potential £30 million in civil penalties issued to landlords over two years, councils collected just £7.5 million. That uncollected revenue represents not only a failure of justice for tenants but also lost funding that could have supported further enforcement activity.

The Local Government Association (LGA) has been clear about the underlying cause. Prior to the 2025 Spending Review, the LGA estimated that councils faced a cumulative funding gap of £8.4 billion by 2028/29 compared to 2023/24. Without additional, upfront funding, the LGA warned it would be "unrealistic and impractical" to expect councils to enforce new standards effectively.

New powers, same resource constraints

The Renters' Rights Act significantly expands what councils can do. Local housing authorities can now:

• Request information from landlords, letting agents, banks, and accountants

• Enter residential or business premises with notice to investigate suspected breaches

• Issue civil penalties up to £7,000 for breaches (such as rent bidding violations) and up to £40,000 for offences (such as unlawful eviction)

• Pursue Rent Repayment Orders and criminal prosecutions against the worst offenders

Critically, councils can retain civil penalty income to fund further enforcement—a model designed to create a self-sustaining compliance regime over time.

Yet staffing remains the bottleneck. A Royal Town Planning Institute (RTPI) survey found that 80% of planning enforcement officers said there were not enough staff to carry out workloads, 89% reported case backlogs, and 73% said their authority had struggled to recruit. While planning enforcement is distinct from housing enforcement, the findings reflect a broader crisis in local authority capacity that extends across regulatory functions.

The Government has committed to further funding tranches beyond 2025/26 and has allocated £50 million to modernise the court system for possession cases. Training programmes through "Operation Jigsaw" and Shelter-led initiatives aim to build investigator capability. But translating funding into operational capacity takes time—and the core tenancy reforms come into force on 1 May 2026.

What this means for the rental market

For landlords, the new regime demands a higher standard of documentation and compliance. Properties must be registered on the forthcoming PRS Database. Safety certificates, tenancy agreements, and deposit protections must be readily available for inspection. Non-compliance risks not only financial penalties but also the inability to obtain possession orders (except for anti-social behaviour grounds).

REalyse data shows considerable variation in rental market dynamics across English regions—with gross yields, days on market, and achieved rents differing significantly by postcode district and property type. Landlords operating in areas with already high council enforcement activity may face greater scrutiny, while those in under-resourced boroughs could see inconsistent application of the new rules.

For tenants, the legislation promises greater security of tenure and protection against poor housing conditions. But the gap between statutory rights and lived experience will depend heavily on local enforcement capacity. Tenants in well-resourced councils may see swifter action against hazards and unlawful evictions; those in struggling authorities may find their complaints languish in backlogs.

Investors and developers monitoring the build-to-rent and buy-to-let sectors should note that professionalisation of the market is accelerating. The combination of mandatory registration, periodic tenancies, and Awaab's Law (requiring landlords to address hazards like damp and mould within strict timeframes) raises the compliance bar significantly. Portfolio landlords with robust property management systems are better positioned to absorb these requirements than those relying on informal arrangements.

Regional variations and the Scottish precedent

It is worth noting that the Renters' Rights Act 2025 applies only to England. Scotland has operated under the Private Housing (Tenancies) (Scotland) Act 2016 since December 2017, which already abolished no-fault evictions and introduced open-ended tenancies. Wales has its own framework under the Renting Homes (Wales) Act 2016, and Northern Ireland operates under the Private Tenancies (Northern Ireland) Order 2006.

Scotland's experience offers some lessons. Research suggests that while tenant security improved, some landlords exited the market—contributing to tighter supply and upward rent pressure in certain areas. Whether England sees similar dynamics will depend partly on how aggressively councils enforce the new rules and partly on broader market conditions, including interest rates, tax treatment, and housing supply.

Outlook: enforcement capacity as the critical variable

The Renters' Rights Act represents a genuine shift in the balance of power between landlords and tenants. Its success, however, hinges on a variable that legislation alone cannot control: local authority enforcement capacity.

The £18.2 million funding boost for 2025/26 is a start, but it covers just one year. Sustained investment in housing enforcement teams, training, and technology will be essential if councils are to match the scale of non-compliance in the private rented sector. Without that investment, the Act risks becoming another set of rights that exist on paper but not in practice.

For property professionals, the message is clear: compliance is non-negotiable, but enforcement will be uneven. Those who prepare now—by auditing documentation, registering with the PRS Database when it launches, and building relationships with reputable letting agents—will be best placed to navigate the new landscape. Those who do not may find themselves on the wrong side of a council that has finally been given the tools to act.