The Renters' Rights Act 2025 (the Act) came into legal force on 1 May 2026, representing a major overhaul of residential tenancy law. Whilst its aim is to strengthen tenant protections, its implications for farms and landed estates, where residential arrangements can range from let cottages and farmhouses to tied accommodation and holiday properties, are significant.
Which lettings will the Act affect?
The Act abolishes Assured Shorthold Tenancies (ASTs), replacing them with Assured Periodic Tenancies and introducing enhanced protections, including the abolition of Section 21, imposing restrictions on rent increases and introducing new possession grounds. However, several important exclusions apply which have relevance in a rural setting.
Under the Agricultural Holdings Act 1986 and the Agricultural Tenancies Act 1995 fall entirely outside the Housing Act 1988 framework. The Act has no application to them, and rights and obligations will continue to be governed by the relevant agricultural tenancy legislation. In relation to a Farm Business Tenancy granted under the ATA 1995 (FBT) that includes a dwelling, a tenancy of less than two years can include short termination provisions provided they are agreed between the parties and the FBT itself would automatically expire at the end of the term. For longer FBT’s, termination would require at least 12 months’ notice, with the notice taking effect on an anniversary date of term of the FBT (i.e. if the ‘term’ commenced on the 1st June at least 12 months notice to expire on that same date would be required).
Where more than two acres of agricultural land are included with a dwelling these are excluded from the assured tenancy regime under paragraph 6 of Schedule 1 to the Housing Act 1988. Care should be taken though: where the land element is minimal or incidental, the exclusion may not apply.
Where a worker's physical presence on the property is genuinely necessary for the performance of their duties, such arrangements do not constitute tenancies at all. The occupier is a licensee, and the arrangement falls entirely outside the Act.
Lettings genuinely made for holiday purposes, are excluded under paragraph 9 of Schedule 1. Landlords should, however, be alert to the risk that arrangements dressed up as holiday lets may be treated as assured tenancies by the courts where the same person occupies the property on a repeat or long-term basis. This may be an issue in the context of longer winter lets where taxation consequences and loss of relief should also be considered.
High-value lettings with an annual rent exceeding £100,000 fall outside the assured tenancy regime entirely.
Where none of these exclusions applies, as will be the case for many estate cottages let on a conventional residential basis — the full suite of reforms will apply from 1 May 2026.
The abolition of Section 21
For most landlords, including farm and estate owners, the abolition of Section 21 is the most significant change. Previously, landlords could recover possession at the end of a fixed term, whether to house an incoming employee, undertake refurbishment, or for broader estate management, by serving a Section 21 notice without needing to provide any reason. The process was relatively straightforward and, if the paperwork was in order, possession was effectively guaranteed.
From 1 May 2026, possession can only be sought through the courts on the basis of one or more of the revised statutory grounds in Schedule 2 to the Housing Act 1988, as amended. For estate owners accustomed to using fixed-term ASTs to manage the rotation of occupancies, this represents a fundamental change. Court proceedings take time and success is not guaranteed where the relevant ground is discretionary. Owners should audit now if any properties need to be recovered in the short to medium term and take advice on whether any of the transitional, or savings, provisions apply that would permit the service of Section 21 notices in respect of existing tenancies. These largely require some form of action to have been taken prior to commencement of the Act.
Relevant grounds for possession
Several grounds under the revised Schedule 2 will be of interest to farm and estate owners:
The agricultural worker ground permits recovery where the property is required for an agricultural worker, provided the original letting was connected with agricultural employment and there is a genuine operational need. Clear documentary evidence of both the original letting's agricultural purpose and the current need would be critical.
Landlord or family member occupation allows possession where the landlord or a close family member wishes to occupy the property as their principal home. This ground is subject to conditions, including restrictions on re-letting within a specified period following a successful order.
Intention to sell permits possession where the landlord genuinely intends to sell. Restrictions apply to prevent abuse, and the intention must be genuine.
Rent arrears and anti-social behaviour grounds are retained, including the mandatory ground where a specified threshold of arrears is met.
Tied and service accommodation
The distinction between a service occupancy and a service tenancy is critical. A genuine service occupancy, where occupation is essential to the proper performance of employment duties, such as for a farm manager or gamekeeper required to be on-site at all times, creates no tenancy and falls outside the Act entirely. However, the courts apply a strict test: a contractual term stating that occupation is required for the better performance of duties will not, without more, suffice.
Where accommodation is provided as a perk of employment rather than an operational necessity, common for estate staff, gardeners, or domestic employees, the arrangement is likely to constitute a service tenancy and would be caught by the Act. Estate owners should review each individual arrangement carefully and take legal advice where there is any doubt.
Practical recommendations & how we can help
Farm and Estate owners should:
Conduct an audit to determine which residential lettings fall within scope or are excluded
Review and, where necessary, restructure employment and occupation arrangements to ensure they are properly documented and legally consistent
Act promptly where possession will be needed in the short to medium term, taking advice on whether transitional Section 21 provisions remain available
Identify in advance the relevant possession grounds for each property and establish the necessary evidential foundations
Prepare for rent review restrictions — existing contractual clauses will cease to have effect
Register on the Private Rented Sector Database and join the Landlord Ombudsman scheme once operational; failure to register will be a criminal offence
Review compliance with the Decent Homes Standard, now extended to the private rented sector
Seek specialist legal advice before making any significant decisions about letting, recovering, or restructuring residential properties on the estate.
We would be happy to advise on any of the issues raised in this article. Please do not hesitate to get in touch with a member of our Farms & Estates team
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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