The Renters’ Rights Act places Landlords in technical breach of their mortgage terms
Thought leadership by Adam Pigott – CEO Openbrix
‘With every Assured Shorthold Tenancy (AST) transitioning into an assured tenancy, the private rented sector (PRS) enters a new chapter—not one of sudden collapse, but of gradual and foreseeable transformation.
The Renters’ Rights Act introduces greater certainty for tenants while removing flexibility for landlords. Yet beneath this promise of security lies a series of unintended consequences that will quietly reshape the PRS over the coming decade.
The origins of this legislation are as significant as its impact. The campaign that led to its creation was built on a fundamental misrepresentation. Section 21 was never an eviction notice—it marked the agreed conclusion of a fixed-term tenancy. Labelling it a “no-fault eviction” was politically expedient but legally inaccurate. Repeated often enough, the slogan became accepted truth and ultimately law. Policy was crafted from headlines, not housing legislation.
The government was fully aware of this distinction. They understood the function of Section 21 and the role ASTs played in revitalising the rental market. Nonetheless, they chose a narrative that prioritised political gain over legal clarity. In doing so, they dismantled the very mechanism that enabled tenant security in the first place.
Prior to the 1988 Housing Act, private renting in Britain was stagnant. Rent Act tenancies offered lifetime security, making repossession nearly impossible. Rents were suppressed, turnover was minimal, and investment had all but disappeared.
The introduction of ASTs changed that. Section 21 allowed landlords to regain possession at the end of a fixed term, restoring confidence in the market. This single clause unlocked billions in private capital, catalysing the buy-to-let mortgage boom of the 1990s and 2000s.
ASTs made the PRS investable. They balanced tenant stability with landlord liquidity. The Renters’ Rights Act disrupts that balance, returning the market to a rigidity that once drove investors away.
Private investors did not enter the market to fulfil a public housing role. They did so because the risk-reward equation made sense: reasonable yields, predictable possession rights, and operational flexibility. The new legislation imposes obligations akin to social housing—indefinite tenancies, rent restrictions, and limited control—without offering the financial support that makes such models viable.
This is not reform. It is a statutory reclassification of private capital into public utility—without consent. While Build-to-Rent operators may absorb these changes due to their long-term, managed models, individual landlords cannot. Their business model relies on flexibility and renewal. Conflating these two approaches creates a market that serves neither.
A critical but overlooked detail lies in mortgage conditions. Most buy-to-let agreements explicitly require properties to be let under ASTs, prohibiting assured tenancies. By mandating assured tenancies, the Act places landlords in technical breach of their mortgage terms—through no fault of their own.
Lenders must now revise products, reissue documentation, and reassess risk models for a market where repossession timelines extend from weeks to months. Until this recalibration occurs, refinancing will stall and credit will tighten. Changing the legal framework of tenancies disrupts not just contracts, but the flow of capital itself.
Initially, tenants may welcome the perceived permanence. The fear of eviction fades, and security feels like progress. However, permanence has its drawbacks. Over time, properties without renewal stagnate. Kitchens become dated, carpets wear, and bathrooms deteriorate. Landlords lose the incentive to modernise, and tenants lack the authority to do so.
What begins as comfort may evolve into frustration. The slow decline seen in post-war council housing risks repeating itself—this time without public funding to intervene. The absence of renewal leads to a disconnect between tenant expectations and property realities.
Many rental properties are owned by long-term investors now entering retirement. Upon their passing, beneficiaries may lack the patience or interest to manage assured tenancies with limited control and reduced yields. The logical response will be to sell—triggering the only remaining clear route to vacant possession.
Andrew Stanton CEO Proptech-PR
VerbaFlo becomes one of the fastest-scaling proptech companies in Europe
The next-generation conversational AI platform transforming property management, has announced that it now powers 25% of all Purpose-Built Student Accommodation (PBSA) beds in the UK – equal to 168,000 beds – just eight months after launching in February 2025. This growth cements VerbaFlo as one of the fastest-scaling PropTech companies in Europe. The platform now generates $100k MRR, with over $1.6M in contracts signed, and is projected to cross the threshold of $1.5M in ARR by December this year.
Additionally, it has now laid down roots in five new European markets: the Netherlands, Portugal, Poland, Austria, and Germany. With this unprecedented growth, VerbaFlo is on track to reach 40% PBSA market share by May 2026, as operators turn to automation to streamline and offset rising operational pressures.
The company’s growth trajectory comes at a critical time for PBSA operators and universities. According to Cushman & Wakefield’s 2025 UK Student Accommodation Report, pockets of underoccupancy are emerging in student accommodation across major university cities amid affordability challenges.
The city struggling the most is Sheffield, which has seen a 17.3% drop in demand – a reflection of the wider pressures facing the PBSA sector, where rents have outpaced the private sector for the first time in seven years. Yet, despite this market underoccupancy, VerbaFlo has captured 25% of the PBSA market and continues to fill beds at a rate individual property managers have been unable to match. Amid this volatility, VerbaFlo’s agentic AI is helping operators adapt. Its flagship outbound automation product, WorkFlo, enables property managers to communicate with tenants 24/7, automating everything from enquiry follow-ups to rent collection.
Operators using WorkFlo have seen: 50% higher lead conversion rates compared to people-managed leads, 95% time savings on repetitive communication tasks, and £1M+ in new revenue from previously lost leads for one operator. The platform’s rapid adoption has been driven by partnerships with major operators including Vita Student, Homes for Students, Housing Hand, Downing, Scape, Moda Living, Fusion Students and more. These clients have used VerbaFlo’s tailored AI technology platform to maintain occupancy levels and streamline operations amid growing economic and administrative pressure.
Sayantan Biswas, CEO and Co-founder of VerbaFlo, said, ‘The PBSA market is experiencing some headwinds in terms of occupancy. With the cost-of-living continuing to rise, room affordability is a real sticking point for students. It’s a leading factor in a behavioural change being felt across the sector. Operators can’t afford to miss a single lead or resident enquiry, at a time when speed, consistency and quality of service could be the point of difference that secures a booking or satisfies an enquiry. VerbaFlo’s AI helps property management teams work smarter by engaging tenants instantly across multiple communication channels in over 180 languages, reducing response times, and ensuring every bed is filled.’
Andrew Stanton CEO Proptech-PR
Labour’s housing progress is more tumbleweed than spades in the ground
An early great soundbite was that the RRA according to the Housing Secretary, ensured that tenants were no longer ‘thrown out with no notice or good reason.’ (Really).
One of the central topics was housing delivery. The government’s target of building 1.5 million new homes during this Parliament was examined closely. Committee members questioned whether the goal is achievable and what measures are being put in place to make it happen.
Planning reform and land supply were also major points of debate. MPs discussed how changes to the planning system could unlock more land for development and speed up approvals. The conversation highlighted the importance of local authorities having the resources and support to handle planning efficiently.
Much was made of the £39Bn earmarked over the next decade for social housing – dreamed up by the Hove flat buyer, before she departed having evaded paying the correct amount of SDLT (I think she still owes the interest and is yet to pay a fine – you could not make it up).
Leasehold and commonhold reform featured as another key area. The committee raised concerns about the rights of homeowners, unfair leasehold practices, and the government’s efforts to modernise these systems. Broader issues around the private rental sector, housing affordability, and standards of accommodation were also discussed.
Homelessness and rough sleeping formed a significant part of the session. The committee explored what the government is doing to reduce homelessness, the pressures facing local councils, and the reliance on temporary accommodation.
The financial health of local government was another recurring theme. Questions were raised about whether councils have the funding and capacity to deliver housing, regeneration and other key services. The link between local authority finances and the government’s broader housing ambitions was made clear.
Andrew Stanton CEO Proptech-PR
