From 1 May 2026, the Renters' Rights Act 2025 will introduce sweeping changes to the private rented sector, handing tenants stronger protections and reshaping the obligations placed on landlords. While the legislation is primarily aimed at residential renting, it has also prompted questions from the commercial property world – particularly among landlords, investors and businesses with mixed-use assets.
For standard office, retail and industrial leases, it is largely business as usual. The Act does not overhaul traditional commercial leasing structures or rewrite the usual rent review mechanisms used in business tenancies. However, where residential units sit within a wider commercial portfolio – such as flats above shops, mixed-use developments or other assured tenancies embedded within commercial assets – the picture becomes more complex.
In those cases, the reforms could have implications for everything from valuation and compliance to possession risk, lender scrutiny and long-term asset management. Residential tenancy structures, rent increase mechanisms and vacant possession assumptions may all come under closer examination as the new rules take effect.
We spoke to Brandon Titterington, head of the commercial property department at Taylor & Emmet, to explore what the changes could mean in practice for commercial portfolios and investors.
From a commercial property perspective, what are the key elements of the Renters’ Rights Act that landlords and investors need to be aware of?
For purely commercial leases, the Act does not replace the Landlord and Tenant Act 1954 regime, which remains the core framework for business tenancies. That means shop, office and industrial lease issues are still mainly governed by the lease terms and the 1954 Act, not the Renters' Rights Act 2025.
However, for mixed-use assets and portfolios with residential units above or within commercial buildings, any residential element will fall within the new regime, even where the overall investment is commercial in character.
Perhaps the most important points to be aware of are:
Section 21 “no-fault” evictions are abolished for residential assured tenancies, so vacant possession planning for flats above shops, offices and other mixed-use property becomes less straightforward.
Landlords must rely on statutory possession grounds, with stronger tenant protections and longer notice periods in some cases, especially where the landlord wants to sell or move in.
Fixed-term residential tenancies are replaced by a more periodic model, affecting tenancy structuring and asset management assumptions.
Rent controls are tighter: rent increases are limited to once a year and tenants can challenge above-market increases used to force them out.
For standard office, retail and industrial leases with no residential occupation, is it largely business as usual?
It is. The Landlord and Tenant Act 1954 regime remains in place and is unaffected for purely commercial property.
There has been some confusion about whether the Act affects commercial rent reviews. Can you clarify where the legislation does – and does not – apply?
The starting point is that the Renters' Rights Act 2025 does not regulate ordinary commercial rent reviews in business leases.
However, the Act does apply where the occupational arrangement is residential, including flats above shops and mixed-use buildings with residential occupation that fall within the new regime. In that setting, provisions such as rent increase controls, tenant challenges and the new possession framework can affect the residential component of a mixed-use asset.
For landlords with mixed-use assets, how significant could the changes be in practice?
Recovering possession of the residential element becomes harder and slower because “no-fault” evictions have gone and landlords must instead rely on statutory grounds.
Tenancy management becomes more complex, with fixed-term tenancies replaced by periodic tenancies and tighter controls on rent increases.
Buyers and funders will want certainty about who occupies residential accommodation and on what terms, which is likely to lead to additional enquiries and potential delays.
Valuations may be affected where vacant possession is assumed, as it can no longer be treated as guaranteed.
What are the biggest implications for investors holding commercial portfolios that include residential units?
Investors would be wise to treat residential units within commercial portfolios as regulated sub-assets requiring closer scrutiny around possession, compliance, valuation and exit strategy.
What sort of due diligence should buyers now be carrying out when acquiring commercial assets with residential elements?
Establish exactly what tenancies exist within the residential parts and whether they are assured tenancies caught by the new regime.
Consider whether vacant possession is needed for redevelopment, refinancing, sale or restructuring, and how easily it can now be achieved.
Ensure compliance obligations around registration, notices, disclosure and complaint handling have been met.
Looking longer term, do you see the Act — or changing public opinion and policy — having any wider impact on the commercial property market, even indirectly?
It is likely the Act will contribute to wider market changes. A two-tier market could emerge, with mixed-use assets potentially valued lower because residential occupation is harder to control, affecting yield assumptions and exit values.
Greater regulatory pressure on residential letting may also push more institutional capital towards purpose-built or professionally managed residential stock rather than informal mixed-use holdings.
How does the TE Business Assist product you offer help support landlords and investors?
We provide a full Business Legal Health Review, giving businesses a clear and structured understanding of where their legal risks sit. For landlords and investors, that includes risks arising from the Renters' Rights Act 2025.
It forms part of our wider ethos: “For you. For life.”
Taylor Emmet comprises experts in a wide range of disciplines, here to help individuals and businesses with all types of legal matters. To book a free legal health review, email Taylor Emmet’s team of experts at info@tayloremmet.co.uk
