Which UK property sectors or regions might be most vulnerable to the proposed 'war on landlords' from union groups in 2026?
Quick Answer
Sectors like HMOs, student accommodation, and PRS properties affected by Section 21 abolition, particularly in regions with high tenant populations like London and major university cities, are most vulnerable to increased regulation following union group pressures post-2026.
## Understanding Vulnerabilities in the UK Rental Market
From May 1, 2026, the abolition of Section 21 no-fault evictions under the Renters' Rights Act 2025 has fundamentally altered the landscape for landlords across the UK, removing a key mechanism for regaining possession. This regulatory shift, alongside potential localised pressures from union groups, suggests specific property sectors and regions may face increased challenges.
### Which Property Types Are Most Exposed?
Certain property types inherently carry higher operational risks or tenant management complexities, making them more susceptible to adverse changes in legislation or increased scrutiny from tenant unions. These typically involve properties with multiple occupants or those catering to specific demographics.
* **Houses in Multiple Occupation (HMOs):** HMOs, particularly those requiring mandatory licensing for 5+ occupants from 2+ households, are already subject to stringent regulations including minimum room sizes (e.g., 6.51m² for a single bedroom). Any additional tenant-centric legislation or enforcement, especially regarding possession, directly impacts these properties due to the higher tenant churn and management intensity. The removal of Section 21 means that managing difficult tenancies in an HMO, where one tenant's behaviour can affect many, becomes more complex, potentially leading to longer void periods and increased costs.
* **Lower-Value Rental Properties:** Properties at the lower end of the rental market often serve more vulnerable tenants and typically generate tighter profit margins. These properties may be targeted by union groups seeking to improve housing conditions or limit rent increases. Reduced rental income or increased compliance costs, for instance from the future minimum EPC rating of C by October 2030 (with a £10,000 cost cap), would disproportionately affect their viability. A £10,000 upgrade on a £150,000 property represents a much larger percentage of its value than on a £500,000 property.
* **Properties with High Turnover:** Any property type that naturally experiences higher tenant turnover will feel the impact of the Section 21 abolition more acutely. Each new tenancy requires careful vetting, and the previous ease of ending tenancies (even if rarely used) provided a safety net for landlords. Now, landlords must rely on specific, often lengthier, grounds for possession, which can lead to extended periods of non-payment or property damage before eviction is possible.
### Regions Facing Higher Exposure
Geographical areas with specific demographic characteristics or local authority policies are more likely to see increased 'war on landlords' pressures.
* **Student Towns/Cities:** Areas with large student populations often have a high concentration of HMOs and frequent tenant turnover. Union groups or student bodies may advocate for greater tenant protections, rent controls, or improved living standards, directly impacting local landlords. For example, a university city like Manchester or Leeds, with a high proportion of young renters, could see more organised tenant activism.
* **Areas with High Rental Demand & Low Affordability:** Cities like London, Bristol, or Brighton, where rental demand significantly outstrips supply and affordability is a major concern, are prime targets for tenant advocacy. Local councils in these areas may be more inclined to adopt policies that favour tenants, such as discretionary licensing schemes, or to act more vigorously on complaints.
* **Local Authorities with Strong Tenant Representation:** Councils where tenant union groups have a strong political voice or influence may be more proactive in using their existing powers, or lobbying for new ones. From April 2025, for example, local councils can charge up to a 100% Council Tax premium on furnished second homes. While BTL properties let on ASTs are typically exempt, this shows a willingness to use taxation to influence property use, which could extend to other landlord-focused policies.
## Investor Rule of Thumb
In an evolving regulatory environment, prudent investors must prioritise robust tenant screening and meticulous property management, especially in sectors and regions prone to increased tenant advocacy, to mitigate the impact of legislative changes like the Section 21 abolition.
## What This Means For You
The shift in legislation and potential for increased union activity underscores the importance of a proactive and strategic approach to property investment. Most landlords find themselves vulnerable not because of market forces alone, but due to a lack of awareness regarding changing regulations and how to adapt their portfolios. Understanding these nuanced risks and developing strategies to mitigate them is exactly what we focus on inside Property Legacy Education, ensuring our investors are well-prepared for future challenges.
Steven's Take
The abolition of Section 21 evictions from May 2026 is a significant change, fundamentally altering how landlords manage their properties and tenants. It moves the UK closer to a European-style tenancy model where security of tenure is higher for the tenant. For investors, this means a greater emphasis on tenant screening and ensuring robust tenancy agreements. Areas with high concentrations of student properties or lower-value rentals will feel this impact most acutely, as tenant turnover is often higher or margins are tighter. My focus is always on understanding the regulations and structuring deals that remain profitable and compliant, irrespective of these shifts. Don't operate in the dark.
What You Can Do Next
Review the Renters' Rights Act 2025: Familiarise yourself with the new possession grounds and notice periods on gov.uk/renters-rights-act for all your properties.
Assess your portfolio's vulnerability: Identify properties that are HMOs, lower-value rentals, or in high-turnover areas, and evaluate their exposure to increased tenant protections.
Research local council policies: Check your specific council's website for any discretionary licensing schemes, selective licensing areas, or proposed tenant-focused initiatives.
Enhance tenant screening processes: Implement more rigorous referencing, credit checks, and guarantor requirements to minimise future tenancy issues.
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