The Renters' Rights Act 2025 came into force today, and for landlords across England, it marks the most significant shift in private rented sector legislation in more than 30 years. While much of the attention has rightly focused on what the new rules mean for your tenancies, the changes also carry real and practical implications for buy-to-let mortgage applications, whether you are looking to purchase, remortgage, or understand where you stand.

This guide explains the key changes, how lenders are responding, and what you should be thinking about if your mortgage is coming up for review.

What Has Actually Changed Today

The two most consequential changes are the abolition of Section 21 "no fault" evictions and the end of fixed-term assured shorthold tenancies.

Section 21, the notice that allowed landlords to reclaim possession without giving a specific reason, no longer exists. Any landlord wishing to end a tenancy must now rely on one of 21 prescribed grounds under Section 8. The most relevant include the tenant falling into rent arrears of at least three months (the threshold has risen from two months), the landlord wishing to sell the property, and the lender's right to recover possession in the event of mortgage default.

All existing assured shorthold tenancies will convert to periodic tenancies as the relevant provisions come into force. Fixed-term contracts no longer exist in any meaningful sense. Tenants will be able to give notice to leave with two months’ notice, subject to the rules set out in the new tenancy framework.

Other changes taking effect today include limiting rent in advance, restrictions on rent increases to once per year via a formal Section 13 notice, a requirement to consider pet requests within 28 days, and a ban on blanket policies refusing tenants who receive benefits or have children. Landlords with existing tenants have until 1 June 2026 to issue the government's information leaflet explaining the reforms.

How Lenders Are Viewing the New Landscape

Buy-to-let mortgage applications are assessed primarily on rental income relative to the mortgage payment, a calculation known as the Interest Cover Ratio, or ICR. Most lenders require the rental income to cover at least 125% of the mortgage payment when stress-tested at a higher notional rate. For landlords holding property in their personal name and paying higher or additional rate tax, that figure typically rises to 145%, which is one reason why the majority of buy-to-let purchases now take place through a limited company. Within a limited company structure, the 125% threshold generally applies regardless of the director's personal tax position.

The end of fixed-term tenancies introduces a new variable into that calculation. With all tenancies now periodic and tenants free to leave on two months' notice, lenders can no longer treat a signed tenancy agreement as a guarantee of future income in the same way they once did. This does not mean buy-to-let lending has ground to a halt, but some lenders are taking a more cautious approach to income assessment as a result, placing greater weight on rental demand in the local area, the applicant's track record as a landlord, and the overall quality of the property.

Where rental yield alone does not quite satisfy the ICR, some lenders will consider top-slicing, which means using the applicant's personal income alongside rental income to demonstrate that mortgage payments can be covered. Not all lenders offer this, but it can make a meaningful difference for landlords whose property yields are moderate relative to current interest rates.

Buying a Property Now

For a straightforward buy-to-let purchase, the tenancy position at the point of application matters less than many landlords assume. Lenders will base their affordability assessment on a projected rental figure, typically confirmed by a local letting agent or the lender's own valuation. The absence of a sitting tenant is not a problem.

The more important decision at the point of purchase is choosing the right lender and product structure from the outset. Given the compliance demands the Renters' Rights Act places on landlords, and the administrative cost of switching lenders every two years, it is often more cost-effective to find a lender whose criteria suit your circumstances and whose rates allow you to switch products internally when your initial deal ends. A rate switch with your existing lender typically requires no new affordability assessment, no legal fees, and no valuation, so choosing a lender you can stay with for the medium term can save a significant amount in cost and hassle over the life of the mortgage. Good advice at the purchase stage is therefore about more than finding the lowest rate today. It is about finding the right home for your mortgage.

The majority of buy-to-let purchases now take place through a limited company, and while this can make the numbers work more favourably from a tax perspective, it requires careful thought and planning before you commit. The lender market for limited company buy-to-let is broad but the criteria varies considerably, and the structure needs to be right from the outset — getting this wrong can be costly to unwind later.

It is also worth being aware that once you own four or more mortgaged buy-to-let properties, lenders will classify you as a portfolio landlord. At that point the underwriting process becomes more involved, with lenders typically wanting to assess the performance of your entire portfolio rather than just the property you are borrowing against. Not all lenders operate in this space, so knowing which ones to approach — and how to present your portfolio — makes a real difference to both the outcome and the rate you achieve.

Remortgaging and Rate Switches

If your existing buy-to-let mortgage is coming to an end, the shift to periodic tenancies should not, in itself, cause a remortgage to fail. Lenders are well aware of the new landscape and are adapting their criteria accordingly.

That said, it is worth taking advice before automatically moving to a new lender. A rate switch with your current lender avoids a full affordability reassessment, no legal fees, and no valuation. For many landlords, staying put and switching products will be the most straightforward and cost-effective option, particularly where the property is tenanted and the rental income has not changed materially. Where your circumstances have changed, or where the market has moved and a better deal exists elsewhere, a full remortgage may still be the right answer, but it is worth comparing both routes with a broker who can access the whole market.

Thinking About Leaving the Market? Selling to Your Tenant May Be Worth Considering

For some landlords, the combination of the Renters' Rights Act, increased compliance demands, and tighter margins has prompted a decision to exit the private rented sector. If that is where you find yourself, selling to your existing tenant can be a cleaner and faster alternative to going through the open market, and there is a mortgage structure that makes it work even if your tenant does not have a deposit saved.

This is known as a concessionary purchase. If you are willing to sell at a genuine discount of at least 10% below market value, your tenant can use that discount as their deposit in the eyes of most lenders, meaning they do not need to bring any cash of their own to the transaction. As an example, if your property is worth £280,000 and you agree a sale price of £252,000, the £28,000 discount functions as a 10% deposit and your tenant can apply for a 90% mortgage on the reduced price.

The advantages for you as the selling landlord are real. There are no estate agent fees on a private sale, no viewings to manage, and no chain to worry about. You continue to receive rent throughout the conveyancing process, and the transaction can often move faster than a conventional open market sale.

Most lenders require the tenant to have been in occupation for at least 12 months before considering a concessionary purchase application, so this route works best for established tenancies. If your tenant has a solid record of paying rent on time and a stable income, they are likely to be in a strong position to apply, and for many the concessionary structure is the difference between being able to buy and not.

How Aspect Mortgages Can Help

Buy-to-let lending has always been more specialist than residential mortgages, and the changes introduced by the Renters' Rights Act have added a further layer of complexity. The right lender for your circumstances, whether you are purchasing, remortgaging, or considering a concessionary sale, is not always obvious, and the criteria being applied is shifting as lenders adapt to the new framework.

We deal with buy-to-let cases regularly for landlords throughout the UK. Our advice fee for a buy-to-let mortgage is £495. If a like-for-like rate switch with your existing lender is the right move, we handle that free of charge.

If you already have a buy-to-let mortgage arranged through us, we will automatically be in touch when your promotional rate is coming to an end to offer advice and support on your next steps.

If you want to understand how the Renters' Rights Act affects your mortgage position, or whether selling to your tenant might be a sensible route forward, get in touch for a no-obligation conversation.

Your property may be repossessed if you do not keep up repayments on your mortgage. The FCA does not regulate Business Buy to Let Mortgages. This article is for information purposes only and does not constitute financial or legal advice.