Law firm Thackray Williams has reported a wave of instructions from landlords looking to sell buy-to-let portfolios ahead of the Renters’ Rights Act 2025 coming into force on 1 May.

The Kent and London firm said its litigation team had been instructed by landlords seeking possession in order to sell entire portfolios, as well as by landlords seeking last-minute Section 21 “no fault” eviction notices for flats and houses.

The Act represents one of the most significant reforms of the private rented sector in recent years. Measures due to take effect include the abolition of Section 21 notices, amended grounds for possession, the end of Assured Shorthold Tenancies, the move to Periodic Assured Tenancies, limits on rent increases, anti-discrimination measures and the right for tenants to request permission to keep a pet.

Mustafa Sidki, contentious construction litigation partner at Thackray Williams, said: “Our clients are all saying the same thing: the new liabilities and reduced flexibility being introduced by The Renters’ Rights Act 2025 from 1 May is the final straw in making their property investments no longer commercially or practically viable, particularly in a challenging economic climate and with other changes also in the pipeline.”

Sidki said the reforms would make possession more difficult and expensive for landlords.

He said: “The changes being introduced by The Renters’ Rights Act this Friday mean it will take longer and cost more for a landlord to regain possession of a rental property.

“This reduced flexibility is causing many landlords to rethink their investment strategies, especially as other factors mean they are facing reduced – and even negative cashflow – while also facing increased admin and responsibilities.”

Claire Josef, conveyancing partner at Thackray Williams, said: “We’re anticipating increased instructions for our conveyancing team as these landlords put their properties on the market as soon as they are able, which in turn could negatively impact property prices, particularly in areas that have traditionally had a strong rental sector.”

Sidki said landlords were also being affected by tax changes and higher finance costs.

He said: “Many portfolios are no longer commercially viable due to landlords losing the ability to deduct full mortgage interest from rental income (under Section 24 of the Finance Act) and the introduction of an additional 2% tax on income from property by Rachel Reeves in her November 2025 budget.

“Additionally, fixed-rate buy-to-let mortgages of 1-2% are coming to an end this year, with new re-finance rates of 5-6% being offered, while the costs of maintaining properties, insurance premiums and local authority licensing fees have all risen this year due to inflation.

“For flat owners, service charges are also going up a lot due to inflation. Whilst service charges can be challenged, freeholders are saying that their own costs are increasing and thus the increases would be deemed reasonable.

“On top of this, landlords now have additional admin with the requirement of quarterly income returns introduced under Making Tax Digital at the beginning of this month.

“With many landlords facing costly upgrades to bring their properties up to EPC C by 2030 under the Decent Homes Standard 2026, many of them are saying the finances simply no longer add up and are rushing to beat the legislation to be able to divest their portfolios.”

Thackray Williams said there are two categories of ASTs that will not become PATs on May 1 2026. These are tenancies where there is a valid pending Section 21 notice, or where there is a valid pending Section 8 notice to start eviction proceedings when the tenant has breached the tenancy.

Paragraphs three and four of Schedule 6 of the Renters’ Rights Act prescribe that a valid Section 21 notice served before 1 May 2026 will remain valid. The tenancy will remain an AST until the landlord obtains possession and the tenancy ends, the notice lapses, or a judge decides the notice is invalid.

Sidki said: “While many landlords have planned ahead for this, we are seeing a significant number of last-minute applications to serve Section 21 notices by Thursday from landlords who have decided property investment is now too challenging to be viable.”