This article first appeared in City & Country, The Edge Malaysia Weekly on December 22, 2025 - December 28, 2025

The Renters’ Rights Act 2025 (RRA), which will come into force on May 1 next year, will significantly overhaul private housing landlords’ rights in the UK. The biggest change among the slew of reforms is the abolishment of no-fault eviction under Section 21 of the Housing Act 1988.

What will this mean for Malaysian investors with rental properties as well as those looking to invest in rental properties in the UK? City & Country asks property experts.

According to JLL Malaysia lead of international residential Chong Shu Ling, the RRA is among the most significant reforms in the private rented sector in decades.

“The primary objectives are strengthening tenant security by replacing fixed-term tenancies with open-ended periodic tenancies, raising standards through stricter enforcement against poor property conditions and improving transparency in the landlord-tenancy relationship,” she says.

“For landlords — including international investors such as Malaysians — this means a shift towards professionalised, better-managed rental operations. While landlords retain the ability to regain possession under legitimate grounds, the process has become more structured and regulated.

“Tenants will have more stability and better rights, landlords will need to adopt higher compliance standards and, overall, the market will become more transparent and attractive to long-term, quality tenants.”

Savills Malaysia group managing director Datuk Paul Khong says, “The Renters’ Rights Act received its royal assent on Oct 27 and has now become law. The legislation will impact all new and existing assured shorthold tenancies (AST), except company lets with rents over £100,000 (RM546,377) per year.

“The Act basically replaces the previous fixed-term AST with the open-ended assured periodic tenancies (APT). These APT tenancies will be month to month until either the tenant serves notice or the landlord meets some grounds for regaining possession.

“Tenants will have a 12-month protected period but they can serve notice to terminate. Tenancies will have no end date and will roll on a monthly basis. We note that, on average, tenants stay in their rented property for at least two years and it’s more common for a tenant to serve notice.”

Khong says the RRA also strengthens requirements on housing quality for private rentals, such as the introduction of a planned “decent homes standard” and extending health-safety obligations by addressing hazards like damp and mould, among others.

“Landlords will face greater regulatory oversight, which potentially includes a centralised private rented-sector database with more enforcement mechanisms and stricter compliance requirements,” he adds.

The Act will be implemented in three phases, with the first phase taking effect on May 1, 2026.

“Phase 1 will implement tenancy reform measures on both new and existing tenancies, including the abolition of Section 21 (no-fault eviction) notices, a transition to assured periodic tenancies, caps on rent in advance, anti-discrimination measures, a ban on rental bidding, a limit on rent increases to once a year and provisions allowing tenants to request pets,” says Knight Frank Property Hub associate director for international project marketing Dominic Heaton-Watson.

“Phase 2 will take place from 2027 into 2028 and will include the introduction of the PRS (private rented sector) database and the Landlord Ombudsman.

“Phase 3 is likely to occur between 2035 and 2037 and will include the implementation of Awaab’s Law and the Decent Homes Standard.”

Awaab’s Law requires landlords of social housing to fix dangerous damp and mould within set time periods and repair all emergency hazards within 24 hours. The law came about after the 2020 death of Awaab Ishak from a respiratory condition caused by prolonged exposure to mould in the social housing his family rented in Rochdale, Greater Manchester.

The Decent Homes Standard sets minimum quality rules for housing, primarily for social housing, and will extend to the private rented sector. Homes are required to follow four criteria: The house must be fit for living in, with no serious health and safety hazards; the condition of the house is good; it provides modern facilities; and has good thermal comfort and energy efficiency.

Heaton-Watson remarks that the rental environment will become more tenant-friendly. On the other hand, landlords, in particular international ones, will need to be more careful and ensure compliance with rules and regulations.

“The private rental sector is likely to move away from a high-turnover, short-term model towards a more stable environment where renting resembles long-term residence rather than temporary accommodation.

“This shift may attract households looking for security — including families, long-term employees and professionals — reducing tenant churn and encouraging a mindset of ‘tenant as resident’ rather than ‘tenant as transient occupant’.

“In the longer run, the reforms may drive greater professionalisation within the sector, with landlords operating more like long-term housing providers rather than casual or ad-hoc investors,” he says.

For investors with existing property, the experts provide insights into factors to consider before the RRA comes into force.

JLL’s Chong highlights three key areas — property condition and compliance; documentation and tenancy agreements; and working with letting and management agents.

“Ensure that the property meets the minimum energy and safety standards, has property documentation for gas safety, electrical reports and so on, up-to-date repairs and maintenance. With stronger enforcement, non-compliant properties risk penalties and rental disruption.

“Current tenancy agreements may need to transition to the new open-ended periodic structure and landlords should understand the new grounds for possession, notice periods and any changes required by managing agents.

“Professional management becomes more important and landlords should review how their agents handle compliance, their tenant vetting process and their readiness for the new rules,” she advises.

Savills’ Khong highlights that landlords can only evict tenants in compliance with Section 8 of the RRA — if the landlord is moving back into the property or selling the property, the tenant has unpaid rent and anti-social behaviour on the part of the tenant.

“Moving forward, AST will be converted into APT irrespective of any ongoing lease agreement,” he says, adding that the new Act also stipulates that rents can only be raised once a year with notice and must be based on comparable data. He also highlights the importance of the upkeep and maintenance of the property.

“In short, treat your UK rental properties as a regulated business — maintain documentation, rent records, inspection/repair logs, and you’ll probably need to hire professional property managers,” Khong says.

Knight Frank’s Heaton-Watson advises, “Review your tenancy agreements and documentation. Under the RRA, existing ASTs will convert automatically into APTs.

“If you don’t already have a written tenancy agreement, you’ll need to create one and provide it to your tenant. Once the law kicks in, you must also provide tenants with a government-issued ‘information sheet’ summarising the changes.”

He adds that the property needs to be in compliance with quality standards. “If your property currently has issues like damp, disrepair or safety hazards, now is a good time to fix them and document compliance, so you don’t run into [problems with] enforcement or fines later.”

In addition, Heaton-Watson says existing investors should prepare for limitations in rent setting and rent increases as the law bans rent bidding. Advertisements must state the fixed asking rent and that rents can only be increased once a year.

Investors should also evaluate the tenancy screening and letting practices as discrimination against tenants on benefits or with children, as well as refusing pets, may be unlawful and landlords must consider the request “reasonably”.

“In the later phases — late 2026 onwards — there will be a mandatory national Private Rented Sector Database, where landlords must register their properties and provide detailed information such as contact details, property data, safety certificates and occupancy. If you use a letting agent, ensure they are aware of the changes and are prepared to meet the new administrative tasks,” Heaton-Watson advises.

Chong says investors looking to purchase UK property to rent out should evaluate factors such as property quality and long-term rental demand, property compliance readiness and choice of professional management.

“Higher [property] standards means investors should prioritise new-built or well-managed developments and areas with strong rental fundamentals, such as near universities, transport hubs and regeneration zones.

“Investors should budget for maintenance, upgrading of older properties and any ongoing management fees. A well-maintained property will attract better tenants and reduce future regulatory risk.

“With the Act raising expectations for landlords, having a reliable management agent is increasingly essential for overseas buyers who cannot manage day-to-day compliance,” she adds.

Khong, meanwhile, advises investors to consider carefully the long-term ramifications of entering the rental market in the UK as the law now holds landlords to a higher standard.

“You are now in for a ‘longer-term’ tenancy with less flexibility for vacant possession, where the buy-to-let property becomes a long-hold income-yield asset,” he says.

“Cash flow may be constrained where rent increases become more limited or restricted while expenses, such as for maintenance and compliance, will rise, with void periods also lengthening.

“Tenant quality becomes more critical since eviction is difficult. Landlords need more reliable long-term tenants especially working-class professionals with a stable income record.

“Property maintenance will increase for older homes, for upgrades to adhere to new decent home standards. And regulatory risks and administrative burdens with extra paperwork, compliance and inspections are forthcoming.”

For Heaton-Watson, there are various factors to consider. “Is the market stable, mature, resilient and transparent? Are the legal ownership rules strong? Is there consistent long-term capital growth and long-term demand? Is there strong rental demand and attractive yields? Where are the amenities like universities and transportation hubs? What are the travel times? Is there a good level of investment in regeneration and infrastructure nearby? And will the property purchase be suitable to build your ‘global wealth’?

“Multiple factors go into a purchase decision — depending on budget, size, timing, specifications or finishes, wants and needs,” he says, recommending that investors speak to trusted advisers familiar with the UK market.

There are concerns that the changes to the legal framework could lead to the rental process getting “stuck”, resulting in the market stalling. The property experts do not believe it will be the case, however.

For Heaton-Watson, it is a matter of short-term pain for long-term gain. “More scrutiny of potential tenants may slightly slow the rental process in the short term, as landlords and agents take longer to verify documents, run checks and ensure full compliance with the new rules. This may create temporary bottlenecks, especially around the time the Act is enforced.

“But it’s unlikely to stall the market. UK rental demand is consistently high, landlords are motivated to keep properties occupied and letting agents have already adapted their workflows. As processes become streamlined — with better technology and clearer guidance — any initial delays should ease.

“In the long run, increased scrutiny will ultimately produce better-matched, more reliable tenants, longer tenancies, and a more professional rental environment,” he adds.

Khong, meanwhile, believes good tenants will benefit. “With APT in place, short- to medium-term adjustments will be required but, over time, the rental market should be stable again. Good renters will enjoy longer-term security and better-quality housing while landlords will continue their due diligence efforts to weed out poor-quality applicants, and rentals will continue an upwards climb in tandem due to both supply and cost issues.”

Chong believes things will only improve. “In my view, the market is unlikely to be ‘stuck’ because tenant demand in the UK remains structurally strong, with a supply shortage in key cities like London, Manchester and Birmingham. Better screening reduces risks for landlords, leading to stable tenancies and fewer disputes, and professional management companies already operate with strong checks so that transition will be smoother for properties handled by established agents.

“Rather than slowing the market, the Act is expected to raise quality and confidence in the sector, benefiting both tenants and responsible landlords, including Malaysian investors,” she adds.

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