Renters’ Rights Act 2025: Rising standards may push up rebuild costs
- RebuildCostASSESSMENT.com
- 1 hour ago
- 3 min read
The Renters’ Rights Act 2025, which received Royal Assent on 27 October, marks the biggest overhaul of England’s private rental sector in a generation.
While much of the attention has centred on tenant protections and the end of “no-fault” evictions, the law could also reshape the financial landscape for landlords and insurers, particularly when it comes to rebuild costs.
Higher property standards, higher rebuild values
A major shift lies in the extension of the Decent Homes Standard (DHS) to private rentals. Previously applied only to social housing, this benchmark now sets clear expectations for safety, repair, and warmth and energy efficiency across the private sector. Landlords will be required to ensure their properties are free from serious hazards and maintained in a good state of repair, an obligation that will drive widespread investment in upgrades.
Works such as damp-proofing, electrical modernisation, improved ventilation, and insulation will not only bring properties up to legal standards but also raise their reinstatement values, which is the cost of rebuilding them after a total loss.
“Each improvement made to meet the new standard increases the cost to rebuild to that same standard,” says Sharon Masters (AIIRSM MARLA), Surveyor and Technical Lead at RebuildCostASSESSMENT.com. “A property refitted with modern materials and energy-efficient systems cannot simply be valued on its pre-upgrade condition. To ensure full protection, rebuild values must evolve with compliance.”
We recently produced a report which goes into detail about energy efficiency retrofits, rebuild costs, and underinsurance. Read it here.
Insurance implications: avoiding underinsurance
These changes are yet another risk of underinsurance if rebuild costs are not reviewed. When landlords make structural or safety improvements, their existing sums insured may no longer reflect the true reinstatement value. Should a claim arise, the payout could fall short of the cost to rebuild to current standards.
With the Financial Conduct Authority’s Consumer Duty reinforcing brokers’ responsibilities to deliver good customer outcomes, regular rebuild cost assessments have become an essential safeguard against foreseeable loss.
The introduction of Awaab’s Law, which mandates strict timelines for resolving hazards such as damp and mould, further solidifies the need for timely property maintenance and accurate insurance valuations.
Compliance and accountability
The legislation also brings in wider measures to professionalise the sector, including a national landlord register, a private rented sector ombudsman, and expanded enforcement powers for local authorities. Non-compliance could lead to fines of up to £40,000 or even banning orders in severe cases.
These changes create a stronger link between compliance and insurability. Insurance policies often require property owners to take “reasonable precautions” to prevent damage – a duty now reinforced in law. Failing to maintain a property to the required standard could therefore jeopardise both legal and insurance standing.
A new baseline for risk management
The Renters’ Rights Act redefines what is considered a safe, insurable home in the private rented sector. For landlords and brokers alike, this demands vigilance and foresight.
Regular rebuild cost assessments will play an essential role in keeping policies up to date with evolving standards. As Sharon Masters says, “A property upgraded today must be insured for what it would cost to rebuild tomorrow.”
The Act sets a higher bar for safety and quality and that progress comes with increased costs. Keeping insurance aligned with those realities will be central to protecting investments and maintaining compliance in the years ahead.
