Fewer than a third of landlords fully understand that the Renters’ Rights Act bans advance rent payments of more than one month with concerns growing that the reforms could unintentionally reduce access to rented housing for some tenants.
Research from LRG found that just 31% of landlords were fully aware of the new restriction. Some 43% said they knew the rules had changed but were unclear on the detail, while 26% said the restriction was entirely new to them.
The findings come as the private rented sector adjusts to the biggest legislative overhaul in decades, with the Renters’ Rights Act abolishing fixed-term tenancies, introducing Assured Periodic Tenancies and restricting advance rent payments to one month.
LRG says the changes, while intended to strengthen tenant protections, were already influencing landlord behaviour and risk appetite.
HIGHER-RISK APPLICATIONS
According to the research, 58% of landlords expect to receive more borderline or higher-risk applications as a result of the advance rent restriction, including 18% who expect a significant increase. Only 10% believe applicant quality will improve.
At the same time, 38% of landlords said they were either reconsidering whether to remain in the rental market altogether or had become significantly more selective about who they would accept as tenants. A further 6% said they had become slightly more selective.
The report also highlights growing reliance on professional letting agents, with 42% of landlords saying they would depend more heavily on agents to screen applicants and manage risk.
RENTAL SUPPLY
Concerns over rental supply remain significant. LRG’s research found that 70% of landlords would not consider letting properties to local councils or housing associations, while fewer than 1% currently do so.
Meanwhile, 69% of tenants surveyed said they were heavily or completely dependent on the private rented sector, with few alternative housing options available to them.
CRITICL ROLE
Allison Thompson (main picture, inset), Chief Lettings Officer at Leaders, part of LRG, says “The Renters’ Rights Act has some genuinely important protections for tenants, and we support the direction of travel. But the data should give policymakers pause.
“When more than half of landlords expect to see higher-risk applications as a direct result of removing advance rent, and 17% are considering leaving the sector altogether, we have to ask whether the rules are working as intended.
“The tenants who most need stability are the same ones who will struggle most if supply contracts further. Agents have a critical role to play right now – helping landlords navigate the changes, stay in the market, and keep letting to a wide range of tenants.”
