Leicester Landlords: The Tenancy Clause Putting You at Risk

The Hidden Clause That's Putting Leicester Landlords at Serious Risk

If you're a landlord in Leicester or Oadby and you haven't reviewed your tenancy agreement recently, there's a very good chance you're sitting on a legal time bomb — and you probably don't even know it's there.

We're not talking about obvious mistakes or glaring errors. We're talking about perfectly ordinary-looking clauses that were completely standard in tenancy agreements just a few years ago, but are now either unenforceable, unlawful, or actively working against you under the Renters' Rights Act 2024.

The landlords most at risk aren't the careless ones. They're the ones who downloaded a template a few years back, maybe tweaked it slightly, and genuinely believe they're covered. The clause is right there in black and white — it must be fine, right?

Not any more.

In this article, we'll walk you through exactly what changed on 1 May 2026, which clauses are now causing serious problems for landlords, how rent increases must legally work going forward, and what you should do right now to protect yourself — particularly if you're letting property in areas covered by Leicester's selective licensing scheme.

What Changed on 1 May 2026

The Renters' Rights Act 2024 came into full force on 1 May 2026, and it fundamentally reshaped the legal landscape for private landlords across England. If you haven't already made yourself familiar with the key changes, here's a quick summary of what matters most.

Fixed-Term Tenancies Are Gone

From 1 May 2026, it is no longer possible to create a new fixed-term assured shorthold tenancy (AST). All new tenancies — and, crucially, all existing tenancies that were already in place — automatically converted to rolling periodic tenancies. This means your tenancy now runs on a month-to-month basis, with no fixed end date.

This single change has enormous knock-on effects for how your tenancy agreement reads and operates. Many clauses that were written specifically for fixed-term arrangements now either make no legal sense or, worse, create contradictions that could undermine your position in a dispute.

Section 21 Is Abolished

The so-called "no-fault eviction" route — Section 21 — no longer exists. If you need to regain possession of your property, you must rely on one of the grounds set out under Section 8 of the Housing Act 1988, and you must be able to evidence your case clearly.

This makes the quality and accuracy of your tenancy agreement more important than ever. A poorly drafted agreement, or one containing clauses that a tribunal finds unfair or unenforceable, will not help your case.

Contractual Rent Review Clauses Are Now Void

This is the one that catches the most landlords off guard.

Any clause in your tenancy agreement that purports to increase rent automatically — whether linked to inflation, a fixed percentage, or a stepped schedule — is now legally void. It doesn't matter if your tenant signed it. It doesn't matter if it seemed perfectly reasonable at the time. If it bypasses the statutory process, it cannot be enforced.

The Hidden Clauses You Need to Find

Let's get specific. Here are the most common problematic clauses we're seeing in older tenancy agreement templates — the ones that looked perfectly reasonable when they were drafted but are now creating real legal exposure for landlords.

Automatic or Index-Linked Rent Increases

This type of clause typically reads something like:

"The rent shall increase annually in line with the Consumer Price Index (CPI) / Retail Price Index (RPI) on each anniversary of the tenancy."

Or perhaps:

"The landlord reserves the right to increase the rent by [X]% each year."

Under the old fixed-term AST model, these clauses were widely used and broadly accepted. Under the Renters' Rights Act, they are void. Full stop.

Rent increases must now follow the statutory Section 13 process — and that process cannot be contracted out of or replaced by a private agreement between landlord and tenant.

Stepped Rent Increases

A stepped rent clause sets out a schedule of rent increases in advance — for example, £900 per month in year one, £950 in year two, £1,000 in year three. Again, this was a common feature of fixed-term tenancy agreements and was often used as a transparent, agreed-upon arrangement.

The problem is that these clauses are now unenforceable for exactly the same reason as automatic increases. The rent can only be increased through the statutory process, and any attempt to enforce a pre-agreed stepped increase outside of that process will fail.

Disproportionate Penalty Charges

Many older templates contain clauses that impose fixed financial penalties on tenants for specific behaviours — late rent payments, lost keys, breach of tenancy conditions, and so on. Some of these charges are entirely reasonable. Others are not.

Where penalty charges are disproportionate to the actual loss suffered, they may fall foul of the Tenant Fees Act 2019 (which has been in force since 2019 but is still frequently overlooked in older templates) or be found unenforceable as unlawful penalty clauses under general contract law.

If your agreement contains a clause charging a tenant £150 for losing a key, or imposing a fixed daily charge for late rent that bears no relation to your actual financial loss, you may find that clause challenged — and found wanting.

Broad, One-Sided Landlord Powers

Some older templates contain sweeping clauses that give landlords broad unilateral powers — the right to enter the property with minimal notice, to make decisions about the tenancy without reference to the tenant, or to impose charges or conditions at will.

Individually, some of these clauses may be enforceable. Collectively, or in certain combinations, they may be assessed as unfair contract terms under the Consumer Rights Act 2015. If a court or tribunal finds that your agreement contains unfair terms, it can strike them out — and in some cases, that can have wider consequences for your ability to rely on the agreement at all.

How Rent Increases Must Work Now

Given that so many common rent review clauses are now void, it's worth being very clear about the only lawful process for increasing rent under the current legislation.

Here's how it works:

Frequency — You can only increase the rent once every 12 months. No exceptions.
Market rate — Any increase must be in line with open market rates for comparable properties in the local area. You cannot simply increase rent by an arbitrary amount.
Notice — You must serve a valid Form 4A (Section 13 Notice) on your tenant, giving them at least two months' written notice of the proposed increase.
Tenant's right to challenge — Your tenant has a clear statutory right to refer the proposed increase to the First-tier Tribunal (Property Chamber), which will assess whether the proposed rent is in line with the open market. If the tribunal finds your proposed increase is excessive, it can reduce it.
No shortcuts — You cannot use a clause in your tenancy agreement to bypass this process, even if your tenant has signed it and appears to agree to it.

The key takeaway: If your tenancy agreement contains any rent review clause that doesn't align with this process — or that purports to replace it — that clause is void. The statutory process applies regardless.

Why This Matters Even More in Leicester

If you're letting property in certain parts of Leicester, you have an additional layer of compliance to consider: selective licensing.

Leicester City Council's selective licensing scheme currently covers properties in the following wards:

Saffron
Stoneygate
Braunstone Park & Rowley Fields
Westcotes
Fosse

This scheme runs until October 2027, and it means that the council is actively monitoring compliance standards across the private rented sector in these areas. Licence conditions typically require landlords to use appropriate tenancy agreements and to manage their properties in accordance with current legislation.

If your tenancy agreement contains clauses that are now unlawful or unenforceable, and this comes to light during a licence check, a complaint from a tenant, or a tribunal dispute, it will not reflect well. At best, it creates unnecessary complications. At worst, it could affect your licence or result in formal enforcement action.

Even if your property falls outside the selective licensing area — in Oadby, for example — the principle remains the same. An outdated agreement is a liability, not a safety net.

Your Practical Action Checklist

The good news is that this is entirely fixable. Here's what we recommend every Leicester and Oadby landlord does right now.

1. Pull Out Your Current Tenancy Agreement Template

If you're using a template you downloaded more than 18 months ago — or one provided by a service that hasn't updated it since the Renters' Rights Act came into force — treat it as suspect until proven otherwise.

2. Search for Rent Review Clauses

Look for any clause that mentions rent increases, annual reviews, index-linking, stepped rents, or percentage increases. If you find one, it almost certainly needs to be removed or rewritten to reflect the statutory Section 13 process.

3. Review Penalty Charges

Go through every clause that imposes a financial charge on the tenant. Ask yourself: is this charge proportionate to the actual loss or cost involved? If you can't justify the figure, remove it or reduce it.

4. Check for Sweeping Unilateral Powers

Look for any clause that gives you, as the landlord, broad powers to act without notice, impose conditions, or make unilateral decisions. Consider whether these clauses are genuinely necessary and whether they would withstand scrutiny as fair contract terms.

5. Ensure the Agreement Reflects Periodic Tenancy Law

Your agreement should no longer reference fixed terms, break clauses, or renewal mechanisms in the way older AST templates did. It should clearly reflect the periodic nature of the tenancy and the rights that come with it.

6. Build a Clear Paper Trail

For every rent increase going forward, keep a copy of the Section 13 notice, proof of service, and any correspondence with your tenant. If a dispute ever arises, your documentation is your defence.

7. Seek Professional Guidance

This is not an area where guesswork is wise. If you're unsure whether your agreement is compliant, speak to a qualified letting agent or solicitor who specialises in residential lettings. The cost of getting it right now is a fraction of the cost of getting it wrong later.

Don't Let a Hidden Clause Cost You

The landlords who will struggle most over the coming months and years are not the ones who knew the rules and ignored them. They're the ones who thought they were fine — because they had a signed agreement, because they'd always done it that way, because nothing had gone wrong yet.

The Renters' Rights Act has changed the rules in ways that are easy to miss if you're not actively looking. A clause that was perfectly standard in 2022 may be entirely void in 2026. And a void clause in a tenancy agreement doesn't just fail to protect you — it can actively undermine your position when you need it most.

At Signature Lettings, we work with landlords across Leicester and Oadby every day to make sure their agreements, their processes, and their compliance are exactly where they need to be. We understand the local market, we understand the legislation, and we understand what's at stake for landlords who want to protect their investment for the long term.

If you'd like us to take a look at your tenancy agreement, or if you simply want a conversation about where you stand, we'd be happy to help.

Call us on 0116 482 1359, email us at lettings@signaturelettings.co.uk, or pop into our office at 40 The Parade, Oadby, Leicester, LE2 5BF. We're open Monday to Friday, 9:00am–5:30pm, and Saturday, 10:00am–4:00pm.

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