Renting Out a London Flat in 2026: The Renters’ Rights Act, Deposits, Licensing and the 90-Night Rule
If you buy a London flat to let, you are letting under a new system. Since 1 May 2026, most private tenancies in England are assured periodic tenancies with no fixed end date, “no-fault” evictions under section 21 have been abolished, and a landlord who wants the flat back needs one of the legal grounds for possession. A tenant who pays and keeps to the terms can stay for as long as they like, and can leave on two months’ notice.
The other rules an overseas landlord meets have been in place longer. Deposits must be protected in a government scheme within 30 days, and are capped at five weeks’ rent for most lets. Several London boroughs require a licence for some or all rented homes. And in Greater London, letting a home as a short let for more than 90 nights a year needs planning permission.
Below we go through each of these as of October 2026, then the tax on the rent, which is withheld from the rent itself when the landlord lives abroad. Tax figures are those in force before the Autumn Budget on 28 October 2026.
What changed on 1 May 2026
The Renters’ Rights Act 2025 received Royal Assent on 27 October 2025, and councils gained new investigation and enforcement powers from 27 December 2025. The main changes for landlords took effect on 1 May 2026:
- Section 21 “no-fault” evictions were abolished. Section 21 notices served before 1 May 2026 had only a limited window for court claims: the earlier of six months from service or three months from 1 May 2026.
- Most new and existing assured shorthold tenancies became assured periodic tenancies, which roll on with no end date. Tenants can leave on two months’ notice.
- Landlords may not accept offers above the advertised rent, adverts must show the asking rent, and a landlord may not ask for more than one month’s rent in advance.
- Landlords may not discriminate against renters with children or on benefits. Tenants may ask to keep a pet, and a landlord can refuse only with a valid reason.
- Maximum civil penalties for certain housing offences rose from £30,000 to £40,000, and rent repayment orders can reach two years’ rent.
Landlords also had to give existing tenants the government’s Renters’ Rights Act Information Sheet by 31 May 2026. If you are buying a flat that is already let, ask the seller for proof that this was done.
Ending a tenancy: the grounds and the notice
A landlord now needs a legal ground and a section 8 notice to regain possession. The grounds include selling the property or moving in yourself, neither of which can be used in the first 12 months of a tenancy, as well as rent arrears and antisocial behaviour. Notice for most grounds is generally four months. For the rent-arrears ground to be mandatory, so that the court must grant possession, three months’ rent must be owed.
The practical meaning for an investor is simple. You cannot end a tenancy just to re-let at a higher rent, and if you plan to sell with vacant possession, you need to allow at least four months’ notice and the 12-month restriction. A flat let to a good tenant is closer to a long-term income than a short-term asset you can empty at will.
Deposits now tie into possession too. From 1 May 2026, a court will grant possession only if the deposit rules were met, or the deposit has been returned or the dispute settled. An overseas landlord who skips the protection step may be unable to get a possession order until the deposit is returned or the dispute resolved.
Setting and raising the rent
You set the starting rent when you advertise, and you must stick to it: no bidding wars. After that, rent can rise at most once a year, using the section 13 procedure and the prescribed Form 4A, with at least two months’ notice. A tenant who thinks the increase is above the market rate can challenge it at the tribunal.
For a sense of the market, the average private rent in London was £2,332 a month in August 2026, up 3.5% on a year earlier. That is an average across all London homes, not a forecast for any one flat.
Deposits and up-front payments
Under the Tenant Fees Act 2019, a tenancy deposit is capped at five weeks’ rent where the annual rent is under £50,000, or six weeks’ rent where it is £50,000 or more. A holding deposit, taken to reserve the flat while checks are done, is capped at one week’s rent. Together with the one-month limit on rent in advance, that sets the most you can collect at the start.
The deposit for an assured tenancy must be protected in a government-approved scheme, the Deposit Protection Service, mydeposits or the Tenancy Deposit Scheme, within 30 days of receipt. We suggest overseas landlords have a regulated letting agent handle this, since the agent also operates the tax withholding described below.
Licensing: check the borough and the street
Three kinds of licence can apply to a rented home in London. A mandatory licence is needed for a house in multiple occupation let to five or more people forming more than one household and sharing facilities; licences last up to five years, and letting an unlicensed HMO can bring an unlimited fine. Councils can also require licences for smaller HMOs, called additional licensing, or for all private rented homes in designated areas, called selective licensing.
Selective licensing has become easier to introduce. Under a general approval effective 23 December 2024, councils in England no longer need the Secretary of State’s consent for selective schemes of any size, though statutory conditions and a 10-week consultation still apply. London boroughs have used the power: Barking and Dagenham introduced borough-wide selective licensing from 6 April 2025, Wandsworth in designated areas from 1 July 2025, Lambeth from 1 September 2025, and Hackney made an additional licensing designation on 1 December 2025.
Schemes differ street by street. Before you let, check the borough’s own licensing page for the exact address, not just the postcode district.
Short lets and the 90-night rule
In Greater London, letting a home as temporary sleeping accommodation is a material change of use that needs planning permission. Since the Deregulation Act 2015 there is one exception: a home may be short-let for up to 90 nights in total per calendar year without permission, provided the person letting it is liable for council tax on it. Going beyond 90 nights without permission is a planning breach. The council can serve an enforcement notice, and continuing after the notice is an offence. Enforcement is hard because councils lack booking data, but that does not make a breach lawful.
The lease and the mortgage often matter more than the planning rule. Most flat leases and buy-to-let mortgages restrict short lets, for example through “private residence only” covenants or mortgage conditions that require tenancies of at least six months. Read the lease of a new-build flat for this before you plan any short-let income. A national short-term let registration scheme for England is now expected to start in March 2027, with operational details still to come.
Tax on the rent, and what is still to come
An overseas landlord’s rent is taxed in the UK. Under the Non-Resident Landlord Scheme, a letting agent deducts basic-rate income tax, currently 20%, from the rent after expenses and pays it to HMRC each quarter, unless HMRC has approved the landlord to receive the rent gross and file a Self Assessment return instead. From 6 April 2027, legislated property income rates of 22%, 42% and 47% apply in England, and the withholding rate moves to 22%. These rates are as of October 2026, before the Budget on 28 October 2026, and measures that are announced but not legislated are not law. Our guide to taxes for overseas owners covers them in full.
Several rental reforms are announced but not yet in force:
| Measure | Status as of October 2026 | Expected timing |
|---|---|---|
| Private Rented Sector Database, with mandatory landlord registration and an annual fee | Announced | Regional rollout from late 2026 |
| PRS Landlord Ombudsman, mandatory membership | Announced | Expected 2028 |
| Decent Homes Standard for private rentals | Proposed | 2035 or 2037 |
| Awaab’s Law for private rentals | Announced | No date |
| National short-term let registration | Announced | Expected March 2027 |
| Property income tax rates of 22% / 42% / 47% | Legislated, not yet in force | From 6 April 2027 |
Before you let: what to check
- Does the lease allow letting, and on what terms? Does it forbid short lets?
- If you have a mortgage, do its conditions allow the tenancy you plan, and is it a buy-to-let product?
- Is the address inside a selective or additional licensing scheme, and does the borough need a licence before the tenant moves in?
- Who will protect the deposit within 30 days, and who will handle Non-Resident Landlord tax?
- Who pays council tax while the flat is let, and while it is empty between tenants? Confirm with the borough and the agent.
- Are you prepared for a tenancy with no end date, and for notice periods of around four months if you want the flat back?
For the whole cost of holding a let flat, see our running costs guide. London homes we currently work with are on our properties page.
