Section 24 & The Renters’ Rights Act 2026: A Sector Under Pressure

The UK rental market is set for a historic transformation. From May 1, 2026, the government’s Renters’ Rights Act will come into force, introducing sweeping reforms designed to protect tenants and rebalance the relationship between renters and landlords.

But while the reforms demand professionalism and business-level standards from landlords, the tax framework under Section 24 of the Finance Act continues to treat them as if they are not running a business. This contradiction is at the heart of the challenges facing the private rented sector (PRS).

Key Reforms in the Renters’ Rights Act

❌ Ban on “no-fault” evictions – landlords must provide valid grounds (e.g., selling, tenant breach).📈 Rent increases limited – only once per year.

💸 Advance rent capped – no more than one month upfront.

🛑 Bidding wars outlawed – tenants cannot be forced into competitive rent offers.

👨‍👩‍👧 Fair access rules – no discrimination against families or benefit claimants.

🐾 Pets welcomed – requests cannot be unreasonably refused.

The Contradiction: Section 24 vs. Professional Standards

The latest guidance on the Renters’ Rights Act makes one thing crystal clear: the entire PRS is being pushed to step up. Landlords and agents are expected to fully understand the reforms and adjust their business practices.

Yet under Section 24, landlords are taxed on paper profit rather than real income, with mortgage interest relief restricted. This means:

• Landlords are expected to operate like businesses, but taxed as individuals.

• Cash flow pressures are magnified, especially when tenants fall into arrears.

• Court delays (often 12–18 months between application and bailiffs) leave landlords exposed.

Imagine a London landlord owed three months’ rent — potentially £10,000 — while still being taxed as if that income was received. Add mortgage payments, Section 24 tax treatment, and long repossession timelines, and it’s no surprise many unincorporated landlords are leaving the sector.

For Tenants

Tenants gain security, predictability, and dignity:

• No-fault evictions banned.

• Rent hikes capped at once per year.

• Fairer access for families and benefit claimants.

• Pets welcomed into homes.

These reforms redefine renting as a stable housing option, not a precarious stopgap.

For Landlords

Landlords face higher compliance standards and must professionalise quickly:

• Evictions only with valid grounds.

• Rent reviews structured annually.

• Marketing practices transparent and fair.

Savvy landlords may mitigate risks with rent guarantee insurance, but most policies only cover 12 months, leaving gaps in protection when court delays stretch beyond that.

The Bigger Picture

This is the biggest shake-up to the PRS in decades. The UK government wants professionalism, stability, and long-term quality in the sector. But unless taxation aligns with expectations, landlords will continue to exit. reducing supply and undermining the very stability these reforms aim to create.

A Call to Landlords Thinking of Exiting the Market

With Section 24 already squeezing cash flow and the Renters’ Rights Act 2026 demanding higher standards, it’s no surprise that many unincorporated landlords are questioning whether to stay in the sector.

But before you make the decision to sell up or walk away, let’s talk.

At Repossession Rescue, we work directly with landlords who feel trapped between rising compliance costs, tax pressures, and tenant challenges. Whether you’re:

• Facing arrears and long court delays,

• Struggling with mortgage payments,

• Or simply tired of “winging it” without a structured plan,

…there are creative strategies available to protect your portfolio, restructure your position, or exit on your own terms.

👉 If you’re thinking of leaving the market, I’d like to speak with you. Together, we can explore options that safeguard your financial position and give you clarity about the road ahead.