Renters' Rights Act 2025 — why older landlords are leaving and how equity release could replace what they lose
The Renters' Rights Act 2025 abolished Section 21 no-fault evictions, introduced a national landlord register, and tightened standards across the private rented sector. For many older landlords — particularly those who bought buy-to-let properties as a retirement income strategy — the regulatory burden has become the tipping point. If you own your own home and are considering exiting buy-to-let, equity release on your primary residence could offer a cleaner, lower-stress route to retirement income.
What the Renters' Rights Act changed — and why it matters for older landlords
The Renters' Rights Act 2025, which came fully into force in 2025 following its passage through parliament, made the most significant changes to the private rented sector in a generation. The headline change — the abolition of Section 21 no-fault evictions — means landlords can no longer end a tenancy simply by giving two months' notice without a stated reason. All possession proceedings must now be pursued through the Section 8 route, citing specific grounds.
Additional requirements introduced or strengthened by the Act include: a mandatory national landlord register; minimum EPC standards (properties must be EPC Band D or above, with Band C to be required from 2028); a new Decent Homes Standard for the private rented sector; the creation of an ombudsman to handle tenant complaints; and restrictions on in-tenancy rent increases.
For professional landlords with multiple properties and dedicated management infrastructure, these changes are manageable — though they add cost. For older accidental or semi-professional landlords — many of whom bought one or two properties in the 2000s to supplement their retirement income — the combined effect is significant. Property management is more complex, more regulated, and more time-consuming. The administrative demands are harder to meet on a part-time or self-managed basis. And the inability to regain possession easily through Section 21 changes the risk calculation for property that was intended to be available for the landlord's own use or sale at short notice.
The retirement income gap when buy-to-let rental income disappears
For older landlords who exit buy-to-let, the immediate question is where the income comes from instead. Rental income that was covering a proportion of living costs in retirement needs to be replaced — either from savings, pension drawdown, or an alternative asset. If the sale of the buy-to-let generates a lump sum (net of capital gains tax, which must be paid within 60 days of completion), that lump sum could be invested to generate income — but at current yields, a meaningful income stream requires a substantial invested sum.
For older landlords who also own their primary residence outright or with significant equity, equity release on that property could provide an alternative income source that does not require active management, regulatory compliance, or exposure to tenant risk.
A drawdown lifetime mortgage on the primary residence could provide a flexible income supplement — drawn as needed, with no monthly repayment obligation and no property management responsibility. The equity in the primary home has been building throughout the same period as the buy-to-let was held; it may now represent a comparable or larger asset that can be accessed on simpler terms.
Capital gains tax on buy-to-let sale — and what to do with the proceeds
Selling a buy-to-let property typically triggers capital gains tax on any gain above the annual CGT exempt amount (now £3,000 per person per year following recent reductions). CGT on residential property is payable at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers (rates increased in the October 2024 Budget). Payment is due within 60 days of completion.
The net proceeds after CGT can be substantial — particularly for landlords who bought before 2010 and have seen significant price appreciation. Reinvesting these proceeds into income-generating assets, alongside a drawdown equity release on the primary home, could create a retirement income package that replaces or exceeds what the buy-to-let was generating — without any of the management burden.
This type of coordinated planning — combining the buy-to-let sale, CGT management, proceeds investment, and equity release on the primary home — requires both financial advice and property advice. Verity Home can advise on the later-life lending side and work alongside your financial adviser for the full picture.
If the Renters' Rights Act is making you reconsider your buy-to-let, your primary home could offer an alternative route to retirement income. Speak to Verity Home — free, no-obligation advice on equity release and later-life lending.
Book a Free Consultation