Renter’s Rights Act 2025- the end of the long lease assured tenancy saga?

Stephanie Cairns, Associate

The Renter’s Right Act 2025 received Royal Assent at the end of October, and notwithstanding the Act’s primary focus on the private tenanted sector, brings with it a change that will be welcomed by homeowners of certain long leasehold property.  Specifically, the Act contains a change to the definition of an assured tenancy under the Housing Act 1988, excluding from the definition of an assured tenancy any fixed term lease of more than 21 years.

For several years, long leasehold properties with a ground rent of over £250 per annum (or £1,000 in Greater London) which were used as the leaseholder’s main home have been considered to potentially fall within the definition of an assured tenancy under the Housing Act. As a result, there was concern that the landlord could issue a claim for possession of the property in the same way as an assured tenancy if the rent was unpaid, meaning that the usual rules around forfeiture, and crucially, relief from forfeiture, did not apply.  As a result, many lenders refused to lend on properties with a yearly rent above £250 (or £1,000 in Greater London) unless one of three things happened:

• The lease was varied to reduce the amount of ground rent payable;
• The lease was varied to include a mortgagee protection clause, requiring the landlord to give the lender notice prior to taking any forfeiture action; or
• An indemnity policy was purchased, to protect the lender from any forfeiture action taken by the landlord.

This was, in turn, potentially costly and time consuming, adding further work to an already time-sensitive conveyancing process.

Although we await most of the implementation details in respect of the Act, we do know that this part will come into effect from 27^th December 2025 and any doubt as to the status of a long leasehold property should be eradicated. A small change, but likely a very welcome one for all affected. If you have any enquiries about how this change may impact you or your property, please feel free to contact one of our residential property solicitors.