Residential Rental Sector Reforms: Key Changes and Implications

​On 10 June, the Government unveiled long-awaited reforms to rent regulation and tenant security in the residential rental sector.  The proposals aim to balance investor incentives with stronger tenant protections, marking a significant shift toward regulatory stability.
Rent Control
The current Rent Pressure Zone (RPZ) regime will be extended nationwide.  Annual rent increases will be capped at the lowest of:

• Market rent
• Inflation
• 2% (except in periods of high inflation and subject to limited exceptions)

New apartments, where construction begins on or after 10 June 2025, will be exempt from the 2% cap.  Rent increases for these units will be limited to inflation once initially set at market rates.
For tenancies starting on or after 1 March 2026, landlords may reset rent to market levels upon re-letting, provided the previous tenancy ended without fault.  There is also a suggestion that market resets may be allowed after six years of continuous tenancy, though this remains to be clarified.
The scope and impact of these changes will depend on the final legislation.  If implemented broadly, the exemptions for new builds could significantly boost housing supply.
Security of Tenure
The reforms also redefine termination rights based on landlord size:-

• Large landlords (owning four or more properties) will lose the right to terminate tenancies on “no fault” grounds.
• Small landlords may exercise “no fault” termination only at the end of each six-year tenancy period, and only in cases of personal hardship or for use by an immediate family member.

Termination rights for tenant breach remain unchanged.
Conclusion
These reforms represent a major evolution in tenancy regulation.  While the nationwide RPZ expansion and revised termination rules enhance tenant protections, their success will hinge on whether they also stimulate new housing supply.  With implementation timelines already underway, stakeholders should prepare for legislative developments and engage proactively.