The Renters’ Rights Act 2025 introduces the most significant overhaul of tenancy legislation in decades. For HMO landlords, the impact will be even more substantial due to higher turnover, tighter compliance requirements, and the greater operational complexity of shared housing.

At Gallacom, we’ve broken down the key changes — including the abolition of Section 21, the end of fixed-term ASTs, new rent increase rules, and more — with a clear focus on what this means in practice for HMO owners and investors.

1. Section 21 Abolished in May 2026

This is the most far-reaching change in the Act and one every landlord needs to prepare for.

From May 2026, you will no longer be able to evict tenants using a Section 21 notice. Every possession claim will need to be made using Section 8 — which requires the landlord to prove a valid statutory ground such as arrears, anti-social behaviour, or property breach.

The new Section 8 arrears rule: 3 months instead of 2

Under current rules, a landlord can serve notice when a tenant reaches 2 months of arrears.

From May 2026:

• The threshold doubles to 3 full months of arrears before you can rely on the mandatory ground for eviction.

This increases the financial exposure for HMO landlords.

What HMO landlords should do now

• Review your tenants before Section 21 is removed.
  If there are problematic tenants you intend to remove, it is far easier to do so before May 2026.
  
• Build a larger cash buffer to protect against extended arrears.
  
• Consider rent guarantee insurance. Gallacom can provide this option.
  
• Strengthen your referencing process:
  
  • affordability checks
    
  • employment validation
    
  • guarantors wherever possible
    
  • deeper reviews of past arrears or CCJs
    

Student HMO carve-out

There will be a specific exemption allowing student HMO landlords to regain possession at the end of the academic year.

However:

• Students can still give two months’ notice at any time.
  
• If using a joint tenancy, one student leaving can end the tenancy for all.
  

Our recommendation: move to individual tenancies for student HMOs or start tenancy dates earlier (e.g., July) to smooth void periods.

2. Fixed-Term ASTs Abolished — All Tenancies Become Periodic

Also from May 2026, fixed-term ASTs (6 or 12 months) will no longer exist.
All new tenancies will automatically become rolling periodic agreements.

Key points for HMO landlords

• Tenants can leave with two months’ notice, even if they’ve just moved in.
  
• You will no longer be able to tie tenants into minimum periods.
  
• Some tenants may leave earlier than planned, reducing average tenancy lengths.
  
• On the positive side, the two-month notice is longer than today’s common one-month clause, giving you more time to remarket rooms.
  

Student HMOs

Students will also be on periodic tenancies.
Again, if tenants are on a joint contract, the departure of one tenant can destabilise the entire tenancy. Individual tenancies are strongly advised.

3. Rent Increases Limited to Once Every 12 Months

Under the new rules:

• Landlords may only increase rent once every 12 months.
  
• The increase must follow the new statutory process.
  

Tribunal delay problem

If a tenant challenges the increase:

• A tribunal can take several months to decide.
  
• The increase only applies from the date of the tribunal’s ruling, not from when you initially proposed it.
  

This means landlords could lose months of increased rent, even if the tribunal supports the proposed increase.

What to do

• Review rents annually and avoid large jumps that could trigger challenges.
  
• Stay aligned with local market comparables.
  
• Build potential delays into your forecasts.
  

4. Landlords Must Consider Pet Requests

The Act introduces a duty to “consider” reasonable pet requests.

For professional HMOs

In most shared properties, it will remain reasonable to refuse pets because of:

• shared kitchens and lounges
  
• noise and hygiene issues
  
• possible allergies
  
• licensing or mortgage restrictions
  

You must give a reasoned response, but refusal will generally be justified in HMOs.

5. PRS Database and New Landlord Ombudsman

A new national database for the private rented sector will become mandatory, along with a new Ombudsman system.

Key points

• All landlords must register, even if they use a managing agent.
  
• Each property must be listed and compliance documentation uploaded.
  
• Non-registration may affect a landlord’s ability to regain possession.
  

When will this start?

The government aims for the database to be operational by late 2026, but this may slip into 2027 depending on implementation progress.

Key Dates at a Glance

Change	Date
Section 21 abolished	May 2026
Section 8 arrears threshold rises to 4 months	May 2026
Fixed-term ASTs abolished; periodic tenancies begin	May 2026
Rent increases limited to once per year	May 2026
Pet request rules	May 2026
PRS Database	Expected late 2026
PRS Ombudsman	After database rollout

Final Thoughts

The Renters’ Rights Act will reshape the private rented sector — and HMO landlords will feel the impact more than most.
Early preparation is essential.

At Gallacom, we’re here to help landlords navigate every stage of the transition. From tenant onboarding and referencing, to rent guarantee insurance, compliance management and full HMO operation — we ensure your assets remain protected and profitable.

If you’d like personalised guidance or want Gallacom to manage your HMO under the new regulations, get in touch with our team today.