Preparing for Rent Challenges Under the Renters Reform Act: What London Landlords Need to Know

Understanding the Renters Reform Act's Impact on Rent Increases

From 1 May 2026, the Renters Reform Act introduces a significant change: tenants can challenge any rent increase they believe exceeds the local market rate via the First-tier Tribunal. These challenges will be at no cost to tenants, potentially increasing the volume of disputes landlords face.

The Tribunal has the power to defer rent increases for up to two months to prevent tenant hardship. In cases of system overload, the government may backdate Tribunal decisions. However, a lack of published data on Tribunal processing times complicates landlords' ability to anticipate delays or plan accordingly.

Why This Matters to London Landlords

London's rental market is complex and diverse, with varying local rates across boroughs and property types. The new challenge mechanism means that any rent increase above what tenants or Tribunals consider the "local market rate" could be contested, potentially delaying income and adding administrative burdens.

This risk affects all landlord profiles:

• Single-unit landlords may face disputes without diversified income buffers.
• HMO owners must justify rent increases across multiple tenants.
• Portfolio landlords need scalable processes to manage multiple potential disputes.
• Accidental landlords may be less prepared for legal and operational complexities.

Practical Steps to Prepare

1. Review and Document Rent Increases Carefully
   Base rent increase proposals on robust local market data, such as recent comparable lettings, local rent indexes (like UKHPI), and professional valuations. Document these benchmarks clearly to support your position if challenged.

2. Engage Legal or Specialist Advice Early
   Consult property lawyers or compliance experts to understand the Act’s nuances, including how the Tribunal process works and what evidence is persuasive.

3. Monitor Government Communications
   Stay updated with Ministry of Justice and Department for Levelling Up, Housing and Communities communications regarding Tribunal capacity, procedural guidance, and performance data.

4. Prepare for Potential Delays
   Factor possible deferrals of rent increases into your cash flow and operational planning. Communicate clearly with tenants about possible delays and their rights.

5. Advocate for Transparency
   Encourage landlord associations or professional bodies to request and publish Tribunal processing data, improving sector-wide understanding.

6. Train Your Letting Agents and Staff
   Ensure all involved in rent-setting and tenant communication understand the new rules and the importance of evidence-backed rent increases.

Next Steps for Your Business

• Conduct a portfolio-wide rent review focused on evidence collection and justification.
• Arrange briefings with legal advisors to update rent increase protocols.
• Develop tenant communication templates explaining rent proposals and tenant rights under the Act.
• Review cash flow forecasts to allow for potential income delays from contested rent increases.

How Rentals & Sales Can Support You

Our landlord intelligence team offers tailored portfolio reviews, compliance audits, and pricing strategy consultations to prepare you for the Renters Reform Act. We help implement robust rent-setting and dispute management processes to minimise risk and maximise rental income resilience.

Compliance Disclaimer: This article provides general guidance based on legislation current as of June 2024 and is not legal advice. Landlords should seek professional legal counsel tailored to their circumstances.