The Renters’ Rights Bill – when landlords want to sell
The Renters’ Rights Bill, which was introduced to Parliament on 11 September 2024, reached a critical milestone this week, on 4th February 2025, with its second reading in The House of Lords. The Bill aims to significantly reform the private rental sector in England. A key component of this legislation, and its flagship element, is the abolition of the so called “no fault evictions” under Section 21 of the Housing Act 1988, which currently allows landlords to evict tenants without providing a specific reason. Under the new bill, landlords will be required to provide a valid reason for eviction. However, there is so much more to the Bill than the abolition of Section 21, including the provision and mechanism for when Landlords wish to sell their asset. This is going to change the way in which Landlords approach a sale, how Estate Agents value landords’ properties and, how letting agents approach new instructions – let’s have a look at this aspect now.
To balance tenant security with landlords’ rights, the bill introduces specific provisions regarding the sale of rental properties. Landlords who wish to sell their property will only be able to do so by using a specific Section 8 ground, which will require them to state a valid reason for wanting to sell. They will be prohibited from issuing notice within the first 12 months of a tenancy. This measure is intended to ensures that tenants have a minimum period of stability before facing potential eviction due to a sale.
Once the initial twelve month period has elapsed, landlords intending to sell must provide tenants with a notice period of at least four months before initiating eviction proceedings. This extended notice period is designed to give tenants adequate time to secure alternative accommodation.
An important aspect of the bill is the introduction of a restriction that prevents properties from being re-let for a specified period of 12 months. The intent behind this measure is to discourage landlords from evicting tenants under the pretence of selling the property, only to re-let it shortly thereafter. However, this also means that landlords must be strategic in setting a realistic sale price, as an unsold property cannot be immediately returned to the rental market, potentially leading to extended void periods and financial losses.
The bill also imposes obligations on letting agents. It will be an offence for agents to market a property for rent during the 12 month lock-out period following an eviction for sale. Both landlords and agents will be held accountable for breaches of this provision and letting agents will need to make checks before onboarding new rental properties. We have not seen a draft of the proposed new Tenancy Agreements as yet but, the details will be important as it is believed that sale clauses will need to be prior notice. We would urge you to discuss your plans and intentions with your letting agent, to make sure that any clauses for sale and to permit viewings to take place, are included in your agreement with your tenants.
The Renters’ Rights Bill will introduce significant changes to the eviction process, particularly concerning the sale of rental properties. Landlords must now navigate stricter notice requirements and be mindful of the potential financial implications of the lock-out period. Letting agents, too, must ensure adherence to these new rules to avoid legal repercussions. As the bill progresses through The Houe of Lords, it is crucial for all parties involved in the rental market to stay informed and prepare for these impending changes.
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