Landlords are tightening tenant criteria as regulatory change and rising costs reshape the risk landscape in the private rented sector with growing numbers now insisting on guarantors before agreeing new tenancies.
New research suggests a clear shift in behaviour across the lettings market, as landlords prepare for the removal of Section 21 and tougher rules expected under the Renters’ Rights reforms, which are widely predicted to make regaining possession slower and more complex.
Figures from the latest Alto 2026 Agency Trends Report show that one in three agents say more landlords are demanding guarantors than a year ago, signalling increasing caution as affordability pressures and mortgage costs remain elevated.
The findings come as the sector faces one of its biggest regulatory resets in decades, with landlords expected to have less flexibility to deal with arrears or problem tenancies once the new regime comes into force.
AFFORDABILITY STRAIN
According to Alto, 33% of agents report that guarantor requirements have increased across their landlord portfolios over the past 12 months, with 11% saying the rise has been significant.
The report, based on a survey of 250 estate and letting professionals across the UK, suggests that landlords are responding to a combination of higher borrowing costs, tenant affordability strain and the expected abolition of Section 21 no-fault evictions.
Industry data has already shown possession claims running above pre-pandemic levels, while rents have risen sharply in many parts of the country, increasing the financial risk of failed tenancies for landlords.
FINANCIAL SAFETY NET
Riccardo Iannucci-Dawson (main picture, inset), CEO of Alto, says: “Landlords are nervous, and that’s feeding through into stricter tenant requirements.
“Higher borrowing costs, regulatory reform and longer eviction timelines all change the risk equation. When landlords feel they have less room for error, they look for additional safeguards.”
He adds: “Guarantors are increasingly seen as a financial safety net. But this also adds complexity for agents. More referencing, more paperwork, more compliance checks and more room for friction if processes aren’t streamlined.”
Iannucci-Dawson said agencies will need to adapt quickly as compliance pressures increase.
“When risk rises, admin rises,” he said. “The agencies that can manage guarantor checks, affordability assessments and documentation seamlessly will protect both landlords and tenants without slowing deals down.”
Download the report HERE.
