The Renters Rights Act: a note on mixed-use premises

The Renters Rights Act (RRA), which came into effect on 1 May 2026, sees a substantial overhaul of the residential private rented sector, with the Government hoping to provide a greater level of certainty and security for tenants and to improve the quality of housing in the sector.

While the substantial focus of the RRA - and, thereby, professional discussion and wider media coverage - has been on residential tenant and landlord new rights and responsibilities, there is a need to consider how the Act might impact residential and commercial mixed-use buildings.

• The RRA would only be of relevance where the residential part is let independently of the commercial element with its own tenancy - which could include a sub-letting of part.
• If the whole property - even where it has a residential element - is let to a single tenant by way of a commercial lease, the RRA wouldn’t apply. Consideration needs to be given to whether a sub-letting of the residential element alone will be permitted as that could bring the Act into play.
• Historically, a landlord might have thought that a premium rent could have been achieved by letting the two parts separately, there may now be a bigger incentive to focus on letting of the whole by way of a commercial lease.
• But issues of rent reviews would not be wholly resolved by doing it this way now that upwards only rent review (UORR) clauses at the point of new leases or lease renewals are banned - though not yet in force until 2027 or 2028 - in England and Wales on the The English Devolution and Community Empowerment Act 2026 receiving Royal Assent on 29 April 2026.

The proof of any legislation is in its enactment, enforcement, challenge and testing in law, of course.

But property professionals from all disciplines are keeping watch over the coming months, in particular, on how the Renters Rights Act might initially affect property values and market activity as the legislation begins to bed down.

Similarly, the profession is keeping a watching brief on how legislators envisage a ban on upwards only rent reviews will be implemented now that this has become law.

Protect your lease and yourself with BTG Eddisons

The regulatory landscape for landlords is changing rapidly. Whether you own mixed-use assets, manage investment property or are considering restructuring your leasing arrangements, BTG Eddisons can provide practical advice to help protect value and reduce risk in an evolving market.