Renters’ Rights Act 2026 and the 2025 Budget: What Estate and Letting Agents Need to Know

The UK property sector is entering a period of significant change.

The Renters’ Rights Act, which received Royal Assent in October 2025, will begin reshaping the private rented sector from 2026.

Meanwhile, the Autumn Budget announced on 26 November 2025 has introduced new tax measures that will affect landlords’ returns from 2027 onward.

Together, these changes will influence:

• Landlord behaviour
  
• Buyer demand
  
• The income profile of estate and letting agencies
  
• The valuation of agency businesses over the next three to five years
  

There is no question that regulation and taxation are tightening. But this does not mean a collapse in demand or a decline in agency values.

If anything, it highlights the need for well-run, well-prepared, clear-thinking agencies and those are the businesses that buyers are actively pursuing.

As Lucy Noonan, Founder of Atomic Consultancy, says:

“Legislation comes and goes, but the strongest agencies are the ones that prepare early and stay focused on what they can control. Our role is to cut through the noise and help clients make decisions based on facts, not fear.”

This commentary breaks down the key changes, what they mean for landlord behaviour, and most importantly, how they affect the value and attractiveness of estate and letting agencies when owners come to sell.

End of Section 21 and the move to rolling tenancies

The highest-profile change is the abolition of Section 21 “no-fault” evictions. All new tenancies will become rolling, periodic agreements, and landlords will need to rely on strengthened Section 8-style grounds to regain possession.

This shift increases the importance of:

• Detailed documentation
  
• Clear communication
  
• Thorough record keeping
  

Agents will need to guide landlords more closely through possession processes. “Serving a Section 21 and hoping for the best” is no longer an option.

Rent increases, rent bidding and added tenant protections

The Act restricts rent increases to once per year, bans rent bidding, and introduces further measures allowing tenants to challenge unfair practices.

This does not make life easier for landlords or agents.

It increases paperwork, timelines, and the need for careful communication.

Why this matters for agencies

Make no mistake: this Act creates more red tape, more admin, and more work for everyone involved.

Self-managing landlords may struggle most, which presents an opportunity for professional agents.

Agencies with clear processes and good communication will stand out, while those without structure will feel the strain.

Lucy summarises the reality clearly:

“The Act doesn’t make the industry better; it just raises the bar. Great agents will adapt. Others will fall behind because there simply isn’t enough policing of the rules for standards to naturally rise.”

The 2025 Budget and a Rise in Property Income Tax

Alongside regulation, the Autumn Budget added further pressure by increasing tax on property income.

What has actually changed?

From April 2027:

• Tax on property income, dividends, and savings increases by two percentage points
  
• This sits alongside frozen tax bands, higher running costs, and restricted mortgage relief
  

The change will not push most landlords out of the market, but it will make them more analytical and more selective about what they hold.

A real-world example

A landlord earning around £10,600 profit a year on a typical rental property would see their tax rise by around £212 if they are a higher-rate taxpayer.

Scaled across a small portfolio, this becomes meaningful, not catastrophic, but noticeable, especially when combined with increased insurance, maintenance, and compliance obligations.

The key point is not the numbers, it is the behaviour they trigger.

Why agencies should care

When landlords face increased pressure, they seek clarity.

They review performance, question long-term direction, and turn to their agents for guidance.

As Laura Cooper, Acquisitions Director at Atomic, puts it:

“When tax and regulation move at the same time, landlords look for certainty. Agencies that stay visible, communicate clearly and help clients understand their options will always stand out.”

For agency owners thinking about selling, the strength of your landlord relationships, especially during times of change, becomes part of your valuation story.

How Landlords May Respond in 2026

Despite headlines, Atomic is not seeing widespread landlord exits. The more realistic outlook is adjustment, not withdrawal.

Smaller or accidental landlords may exit — but not in large numbers

Some landlords with one or two properties, particularly older units or high-repair homes, may decide to sell. This creates movement, not collapse.

This may result in:

• Additional sales instructions
  
• Some properties leaving the rental market, depending on who buys them
  

But again, this is marginal and expected.

Portfolio rebalancing, not mass exodus

More experienced landlords will stay in the sector, but reassess what they own.

They may sell weaker assets and reinvest in higher-yielding or lower-maintenance options.

This can create:

• Sales opportunities
  
• New or upgraded management instructions
  
• Stronger, more future-proof portfolios
  

As Lucy often says:

“A supported landlord is a long-term landlord. Agencies that stay close to their clients through change build exactly the kind of portfolios buyers love to acquire.”

Rising demand for full management

With compliance duties increasing, the appetite for professional management will rise.

This is where structured agencies thrive: clear processes, accountable communication and precise record-keeping matter more than ever.

Agencies that demonstrate operational strength will win instructions and attract buyer interest when they choose to sell.

A Stable Outlook for the Wider Housing Market

Despite uncertainty, housing market fundamentals remain stable, even positive.

What the experts are saying

Forecasts show a recovering, not declining, market:

Savills projects UK house prices to grow 21.6 percent between now and 2028

Knight Frank estimates growth of 3 percent in 2026 and 3.5 percent in 2027

A Reuters poll indicates a gradual recovery in demand as Budget uncertainty settles

These forecasts underline a simple truth: This is a period of steady recovery, not decline.

Why this matters for valuations

A more stable sales market means:

• Better transaction predictability
  
• Improved buyer confidence
  
• More movement between renting and buying
  
• Stronger acquisition appetite among larger investor groups
  

As Lucy puts it:

“The headlines are noisy, but the fundamentals are stable. Demand for homes hasn’t gone anywhere. Neither has demand for rentals. Good agencies will continue to do well.”

What This Means for Agency Business Valuations

Valuations in 2026 will be shaped by portfolio quality, financial performance, and operational stability.

Good agencies will continue achieving strong multiples, but buyers are now looking deeper than ever before.

1. Profitability matters more than turnover

Some managed stock may shift as landlords rebalance, but strong agencies with solid margins and stable landlords are still achieving competitive offers.

Buyers now place greater emphasis on:

• Profit per property
  
• Stability of recurring income
  
• Landlord retention
  

A well-run, smaller portfolio often outperforms a larger, poorly structured one.

2. Compliance and operational strength support buyer confidence

Tech and compliance do not directly increase valuation, but they can increase buyer demand.

Buyers want agencies that:

• Are organised
  
• Are easy to integrate
  
• Have consistent processes
  
• Can withstand the new regulatory pressures
  

A messy operation can lead to reduced offers or buyers walking away.

3. Landlord quality is becoming a real differentiator

Agencies built on long-term, low-maintenance landlords consistently achieve better multiples than those relying on transient or problematic stock.

4. Geography remains a major factor

Areas with strong rental demand, good employment, and infrastructure continue to outperform.

Atomic’s pipeline shows clear hotspots where demand from buyers remains particularly strong.

5. Tech-enabled agencies run more efficiently

Technology doesn’t directly increase valuations; however, buyers strongly prefer it because it reduces friction, increases efficiency, and improves integration.

It is not the existence of a CRM that adds value, but the quality of the data inside it.

6. Updated valuation ranges for 2026

To avoid ambiguity, and acknowledging variations across the market, agencies in 2026 are typically achieving:

• 1.5x – 2.7x recurring revenue
  
• 3.5x – 8x EBITDA (for larger operations)
  

These ranges depend entirely on the strength and structure of the business, not just the stock count.

A Note from the Atomic Team

Lucy Noonan:

“Legislation doesn’t reduce business value; poor preparation does. The agencies that embrace the changes and run a clean, organised operation will continue to achieve excellent outcomes.”

Laura Cooper:

“Buyers want quality, not just quantity. When an agency has strong landlord relationships, accurate financials and a well-run portfolio, the offers reflect that.”

How Agencies Can Prepare for 2026 (Especially If Thinking About Selling)

The best-performing agencies in 2026 will be the ones that strengthen their fundamentals now.

Tighten financial reporting

Accurate management accounts and reconciled client money demonstrate stability — the biggest driver of valuation.

This is what gives buyers confidence.

Review compliance and documentation

The Renters’ Rights Act demands better processes. Conducting a compliance audit now allows you to correct issues early and present a well-prepared business when the time comes to sell.

Improve operational efficiency

This includes:

• Strong CRM usage
  
• Robust arrears management
  
• Clear workflows
  
• Reliable communication structures
  

These make the agency easier to run and easier to acquire.

Engage landlords early

Agencies that clearly explain legislative changes and support landlords through uncertainty benefit from:

• Higher retention
  
• Stable recurring income
  
• Lower churn
  

These are the qualities that buyers prioritise most.

Review and improve your fee structure 

This is one of the most powerful ways to increase valuation because it directly affects turnover.

Agencies can strengthen their business by:

• Increasing management fees where appropriate
  
• Reducing reliance on one-off ancillary fees
  
• Shifting let-only landlords onto full management
  
• Ensuring fees are contractual, consistent, and predictable
  
• Reviewing discounts that no longer serve the business
  

This is one of the clearest, most immediate ways to improve business value.

As Laura notes:

“Preparation removes pressure. If you understand your business inside out, you’re in control. And that always leads to stronger offers when the time comes to sell.”

Final Thoughts

The Renters’ Rights Act and the 2025 Budget bring change, complexity and more administration, but they do not undermine agency value.

Demand for rental homes remains strong. The housing market is stabilising. Buyers remain active.

What will change is the gap between well-run agencies and poorly structured ones.

The agencies that prepare now, strengthen their financials, support their landlords, and run efficient operations will continue to attract strong valuations.

If you want to understand what these changes mean for your business, or you are considering your long-term options, the team at Atomic is always available for a confidential, no-obligation conversation.