Landowners and developers will find it much more difficult to gain vacant possession of development land or sites which include residential property let on assured shorthold tenancies after 1 May 2026. Landowners and developers should check all existing, as well as any new development schemes, to ensure they will not be caught out by the changes.
With effect from 1 May this year, existing Assured Shorthold Tenancies (ASTs) will automatically become Assured Periodic Tenancies (APTs). It will no longer be possible for landowners and developers to give a simple voluntary notice to terminate APTs, as they currently do under section 21 of the Housing Act 1988 in relation to ASTs.
Currently, ASTs may be terminated upon not less than two months’ written notice followed by a court possession order if the tenant has not vacated upon expiry of the simple notice. This gives a total timescale of between two to four months before vacant possession might be obtained. Under the new APT regime, from 1 May 2026, landlords will only be able to terminate a residential tenancy where certain statutory grounds apply. These grounds are set out in Schedule 2 of the Housing Act 1988, as amended by the Renters’ Rights Act 2025.
Furthermore, a court order will be necessary to establish one (or more) of the statutory grounds. Typical timescales for gaining possession are likely to increase to between six to eight months. There may also be considerable delays to court and tribunal timetables as a large number of landlords and tenants are anticipated to bring rent review and tenancy possession proceedings under the new legislation.
These delayed timings are likely to impact development land. Typically, developers expect landowners to gain vacant possession of land within not more than three months following the grant of planning permission. This is because developers are running up against a limited time period to mobilise and implement development before planning permission expires. Greater uncertainty over timings mean that landowners should be more wary about granting residential tenancies over current or future development land. Developers may also insist upon much earlier possession being sought over such land.
What do landowners and developers need to do now?
Where residential property tenancies are granted over existing development schemes, steps should be taken before 30 April 2026 to manage the tenancy or gain early possession back from the tenant, as after this date section 21 notices will not be able to be served. Landlords will also need to serve an ‘information sheet’ (to be published by the Government in March) on their existing residential AST tenants before 31 May 2026.
New APT tenancies (granted after 1 May 2026) must contain specific details about the tenancy – the Government are due to publish the details of these in January 2026. There are also statutory controls on the level of rent that may be required under such tenancies.
Landlords and developers should be aware of the changes coming into effect on 1 May 2026 and take professional advice on any residential tenancies that they consider could affect a development scheme sooner rather than later, to avoid running into any issues with regaining possession.
Michelmores property teams are working closely with landlords to prepare for the changes being brought about by the change in legislation.
