Hundreds of thousands of private landlords are now operating without financial protection following what industry specialists describe as the most significant overhaul of renting law in a generation and the potential cost of getting it wrong could approach £20,000.
The Renters’ Rights Act, which came into force on 1 May, has abolished Section 21 “no-fault” evictions. Landlords who need to regain possession must now rely solely on Section 8 of the Housing Act 1988, a court-based process that typically takes six to twelve months. During this period, landlords may receive no rental income at all.
Existing research shows that eviction costs once legal fees and lost rent are combined already range between £12,708 and £19,223, with London landlords consistently facing the highest bills. These figures were recorded under the old regime, and experts expect them to rise further now that Section 8 is the only route to possession. Legal fees alone are forecast to exceed £3,000 per case, even before arrears are factored in.
A Growing Risk: Hundreds of Thousands of Landlords Uninsured
Despite the new legislation now being active, an estimated 400,000 landlords across the UK currently have no insurance cover, leaving them financially exposed if a tenancy becomes problematic.
Craig Morgan, insurance specialist at SJL, warns that the combination of longer eviction timelines and a higher arrears threshold create a financial gap that many landlords are unprepared for. Under the new rules, landlords must now demonstrate three months of unpaid rent before courts must grant a mandatory possession order under Ground 8 an increase from the previous two-month requirement. With no-fault evictions removed, a higher arrears threshold and a slower court process, the financial exposure gap has widened significantly precisely the gap that specialist insurance products are designed to cover.
What Protection Landlords Can Put in Place
Rent guarantee insurance is widely available and typically costs less than a single month’s rent. Policies can cover up to 12 months of lost rental income during legal proceedings and often include legal expenses cover, paying for solicitors, court fees and the full Section 8 process from initial notice to vacant possession.
Given the potential for five-figure losses, the annual cost of cover is considered modest by comparison. Demand has already surged: one analysis recorded a 41% rise in enquiries for rent guarantee insurance between September and December 2025 as landlords prepared for the new legal landscape.
Industry advisers recommend that landlords review their existing policies to ensure they include:
• Rent guarantee cover
• Legal expenses protection
• Updated buildings insurance
The latter is increasingly important following the extension of Awaab’s Law to the private rented sector, which introduces strict deadlines for addressing hazards such as damp and mould.
A Sector Under Pressure
With 4.6 million households renting privately in England, the Renters’ Rights Act affects one of the largest segments of the UK housing market. For landlords caught on the wrong side of a difficult tenancy under the new rules, the financial consequences of being unprepared could be substantial.
Source Ham & High
