Consideration of implications of Renters' Rights Act on valuation

On 27 October 2025, the Renters' Rights Act received Royal Assent.

According to the government:

"The Renters’ Rights Act delivers our manifesto commitment to transform the experience of private renting, including by ending Section 21 ‘no fault’ evictions.

The Act will improve the current system for both the 11 million private renters and 2.3 million landlords in England. It will give renters much greater security and stability so they can stay in their homes for longer, build lives in their communities and avoid the risk of homelessness."

The following are comments from the RICS Expert Working Group who have considered the implications on the market:

The Act brings substantial changes that will affect lenders involved in private rented sector and residential investment financing and in turn raises potential questions around valuation implications in England. These include, but are not limited to:

1. Abolition of 'No fault' evictions, with Section 21 evictions to be abolished. This may have the impact of limiting the speed with which possession will be regained. Section 8 grounds of repossession will remain.
2. End of Fixed-Term Assured Shorthold Tenancies (ASTs). ASTs (new and existing) will be replaced with periodic tenancies (monthly rolling) with no minimum term. Tenants may end the tenancy at any time on two months' notice.
3. Rent Increase Restrictions. No rent increases in the first 12 months. Also, one annual increase thereafter, subject to market value 
4. Potential impact of the cost of compliance with the Act, with enhanced due diligence requirements (for example Decent Homes Standards compliance, Deposit protection scheme compliance).
    

Valuations of properties in this space are specialist in nature. A reminder RICS Valuation – Global Standards, PS 2 Ethics, competency, objectivity and disclosures, states "all members practising as valuers must have the appropriate experience, skill and judgement for the task in question".

RICS emphasises the need for valuers to continue to reflect the market, exercise professional judgement as to the market impact of the implementation of the act, such as the appropriateness of the vacant possession assumption, and the need to appropriately interrogate and adjust comparable evidence obtained prior to and after the Act implementation.

Having considered initial market feedback, as at the date of this articles' publication, RICS considers the use of the 'vacant possession assumption' is still reasonable in the light of the possession grounds set out in Section 8. RICS valuers are reminded the reasonableness of an assumption should be considered on a case-by-case basis in line with the guidance set out in RICS Valuation – Global Standards.

RICS will continue to consider market feedback as the Act takes effect and reflect upon how the market reacts to it.