The Renters Rights Act and new UK property changes taking effect in 2026 will impact homeowners and renters – from no-fault eviction bans to £150 energy bill savings and leasehold reforms
There are some significant legislative changes on the horizon for the property sector that will impact homeowners and renters across the UK in 2026. If you’re a homeowner, renter, or planning to step onto the property ladder next year, these changes could affect you.
These new laws and rule modifications are being rolled out by the Government, with some unveiled in the Autumn Budget.
In November, Chancellor Rachel Reeves presented her second budget to the House of Commons since Labour took the reins. The Chancellor vowed to fill a massive void in public finances following 14 years of Tory leadership.
Among the announcements were plans to alleviate the cost of living through increases to benefits, the minimum wage, and some alterations to the housing sector.
Here’s a rundown of the new property laws and major changes set to take effect in 2025, reports the Manchester Evening News.
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Renters’ Rights Act 2025
The Renters’ Rights Act is a fresh piece of UK legislation passed in October 2025 aimed at revolutionising private renting for both tenants and landlords. Its main provisions will be rolled out in stages, kicking off on May 1, 2026.
A ban on landlords evicting their tenants without reason, also known as ‘no-fault’ Section 21 evictions, will be enforced in just over four months time.
Property owners will also be prohibited from hiking rent more than once annually, whilst being prevented from demanding over one month’s rent upfront when a tenancy commences. Fixed-term agreements will be scrapped in favour of indefinite ‘rolling’ arrangements in the new year, with tenants now able to terminate their tenancy with two months’ written notice.
Competitive bidding between potential tenants will also be halted. Property owners will additionally be barred from discriminating against tenants who receive benefits or have children, and tenants will gain the legal right to request pet ownership, with landlords unable to ‘unreasonably refuse’ consent.
The introduction of the Decent Homes Standard, similar to Awaab’s Law for private rentals, will also take effect, compelling landlords to address problems such as damp and mould within specified timeframes. Housing Secretary Steve Reed emphasised the Government was “calling time” on “rogue landlords” through implementing these measures in the Renters’ Rights Act.
Commonhold and Leasehold Reform Bill
Major overhauls to the leasehold system are also scheduled to take effect next year, which will address ‘unaffordable and unregulated ground rents’, simplify and reduce costs for leaseholders to extend their leases, purchase their freehold or assume building management. Despite the Leasehold and Freehold Reform Act 2024 (LAFRA) receiving Royal Assent under the previous government, many sections remain inactive and will require additional consultation and secondary legislation to be implemented.
The Labour government pledged to bring the act into force “as quickly as possible”, whilst acknowledging “the significant complexity of the task and the importance of taking the necessary time to ensure that reforms are watertight.”
Despite Housing Secretary Steve Reed’s promise that the Commonhold and Leasehold Reform Bill would see a draft version released before 2025 draws to a close, Housing Minister Matthew Pennycook has now revealed the draft legislation won’t surface until the new year.
Florence Eshalomi, who chairs the Housing, Communities and Local Government (HCLG) Committee, declared: “For too many leaseholders, the home ownership dream has turned into a nightmare as they’ve faced soaring ground rent hikes and unreasonable fees.
“The Government’s failure to bring forward the draft legislation before the end of the year, as repeatedly promised, is deeply disappointing. The delay will cause further uncertainty for long-suffering leaseholders. The legislation will be technical, and it is vital the Government gets this right so that reforms deliver for leaseholders. However, further delay will make implementing reform during this Parliament a real challenge. I urge the Government to make every effort to ensure the draft Bill is brought forward as soon as possible in the new year.”
Energy bill savings
Rachel Reeves pledged to slash energy bills through measures in the Autumn Budget.
The Chancellor revealed that households nationwide will benefit from an average £150 reduction on their energy bills come 2026.
She outlined plans to axe the ECO (Energy Company Obligation) scheme brought in by the Conservatives when the current four-year programme ends in March 2026, which currently adds approximately £43 to typical household bills.
Office for Budget Responsibility documents also reveal that another charge from the renewables obligation will be partially scrapped on a temporary basis.
This levy presently adds roughly £90 to average annual gas and electricity costs.
Money expert Martin Lewis has subsequently verified that the cuts will kick in from the April 1, 2026 price cap, equating to about a 3.3p drop in electricity unit rates and 0.3p decrease in gas prices (before VAT).
Addressing the Commons, Rachel Reeves declared: “The Conservatives’ ECO (energy company obligation) scheme was presented as a plan to tackle fuel poverty. It costs households £1.7 billion a year on their bills and for 97 percent of families in fuel poverty, the scheme has cost them more than it has saved. It is a failed scheme.”
She continued: “So, I am scrapping that scheme along with taking other legacy costs off bills. And as a result, I can tell you today that, for every family we are keeping our promise to get energy bills down and cut the cost of living with £150 cut from the average household energy bill from April.”
Mansion Tax
The Chancellor also unveiled a major shake-up at the premium end of the property market by bringing in a fresh ‘mansion tax’ targeting some of Britain’s priciest homes. Starting from April 2028, property owners with homes worth over £2 million will face a new annual high-value council tax levy on top of their current council tax bill.
The system will operate across four price brackets, with charges starting at £2,500 for properties in the entry band worth £2 million to £2.5 million, escalating to £7,500 for homes in the top tier valued at £5 million and above, with all rates adjusted annually for CPI inflation. Treasury estimates suggest this policy will generate £0.4 billion during 2029-30.
Whilst the mansion tax won’t kick in until 2026, crucial groundwork including official property assessments is scheduled for 2026, potentially impacting owners of multi-million-pound homes.
The Office for Budget Responsibility explains: “The Government has announced the introduction of a new high value council tax surcharge. From April 2028, owners of properties identified as being valued at over £2 million by the Valuation Office (in 2026 prices) will be liable for a recurring annual charge which will be additional to existing council tax liability.
“The revenues will flow to central government rather than remain with local government, as is the case for standard council tax. We assume over time there will be full pass-through of the cost of the surcharge into the prices of the liable properties, as well as price bunching to just below each band boundary.
“This slightly reduces the estimated yield by reducing the number of properties in scope of the measure and moving properties into lower charging bands. It also results in lower yield from other property taxes (including stamp duty land tax and capital gains tax) which accounts for the negative yield from the measure in the near term.”
