Brokers have revealed how they began to see a number of buyers leaving the rental market forced to pay extra rent because they were not aware of the change, which came into effect as part of the Tenants’ Bill of Rights on May 1.
Under the rules, tenants in England must give their landlord at least two months’ written notice to end their tenancy. But that’s double the one month most tenants were required to provide before the law took effect.
According to Newspage, mortgage advisers report that first-time buyers are now reaching completion day only to discover they must continue to pay rent, council tax, power and water on the home they have already left.
This extra month of expenses ends the moment they pay the legal fees, moving costs and first mortgage payment.
The typical cost of this extra month, based on average official figures compiled by Newspage, is £1,800. In London, where the average rent alone is £2,317 a month, the bill rises to more than £2,700.
Experts warn that a tenant cannot safely hand in their notice until contracts have been exchanged, because until that point the purchase could still go ahead.
This leaves a dilemma for movers. They either give early notice and a breakdown in the sale could leave the buyer without a home to move into or a rental to stay in.
However, if they present it at exchange, the sooner the purchase is legally confirmed, and with completion usually within a few weeks, the tenant is obligated to pay for their rented home for more than a month after leaving.
Toby Quanstrom, director of Quanstrom Financial, was among those who raised their concerns to Newspage. He said that the government “scored an own goal against the very tenants it set out to protect.”
“The purchasing process takes approximately three to four months from offer to completion, so buyers who offered after the law came in on May 1 are only now completing and discovering the damage,” he continued.
He added: “This, coupled with the April 2025 reduction in the minimum stamp duty for first-time buyers from £425,000 to £300,000, has made it harder to get on the ladder. The solution is simple: let tenants give one month’s notice where an exchange of contracts can be proven.”
What advice do you have for first-time buyers facing additional rental costs?
Although it is an additional cost on top of all the other costs associated with moving and taking out a mortgage, Stephen Perkins, managing director of Norwich-based Yellow Brick Mortgages, advises first-time buyers to factor this rent overlap into their budget.
Meanwhile, Tracey Dixon, buy-to-let mortgage specialist and owner of Cardiff-based Pure Mortgage and Protection, had guidance for anyone unsure of how to proceed.
“My advice is not to give notice just because you have a mortgage offer or an expected end date. Protecting yourself from being without a home should come first, but buyers now need to budget for the possibility of overlap.”
