A quarter of landlords are planning to exit the rental market as a result of the incoming Renters’ Rights Act while those staying are set to significantly tighten tenant vetting, new research suggests.
According to a survey of more than 900 landlords by LegalforLandlords, 24% intend to sell their properties and leave the sector altogether, with a further 13% planning to reduce the size of their portfolios.
The findings underline growing concern around the reforms, particularly the abolition of Section 21 ‘no fault’ evictions and the move away from Assured Shorthold Tenancies to periodic agreements.
Among landlords who plan to remain in the market, 60% said they will apply stricter criteria when selecting tenants, reflecting what many see as increased risk under the new regime.
AFFORDABILITY CHECKS
Half of respondents said they will tighten vetting processes, with 25% planning to do so significantly. More than one in five (22%) will place greater emphasis on income and affordability checks, while 19% will rely more heavily on landlord references.
Credit checks and employment verification are also set to increase, both cited by 16% of landlords, as the sector looks to mitigate risk in a post-Section 21 environment.
Guarantors are expected to play a larger role. Some 53% of landlords said they are more likely to require a rent guarantor, signalling a shift towards stronger financial safeguards.
The research also found that 60% of landlords are now less likely to let to tenants perceived as higher risk, including those on lower incomes or with limited rental histories.
Despite this, 63% said they will continue operating broadly as normal, albeit with greater scrutiny and tighter processes.
RESHAPING LANDLORDS’ RIGHTS
Sim Sekhon (main picture, inset), Group Chief Executive Officer at LegalforLandlords, says: “It’s clear from our research that many landlords are approaching the Renters’ Rights Act with a degree of uncertainty, and that’s entirely understandable given the scale of change being introduced.
“For some, particularly those who have relied on more traditional routes to regain possession, this represents a significant shift in how the sector operates.
“However, it’s important to keep that concern in perspective. The reforms are not about removing landlords’ rights but reshaping them.”
BIG IMPLICATIONS
And he adds: “Landlords who carry out thorough tenant vetting, maintain high-quality properties and take a professional approach to management are unlikely to find themselves disadvantaged.
“What is more concerning is the proportion of landlords considering leaving the sector altogether.
“A reduction in supply at that scale has clear implications for the wider market, particularly at a time when demand for rental homes remains consistently strong.”
The findings add to growing evidence that the reforms could tighten rental supply, potentially placing further upward pressure on rents as demand continues to outstrip availability.
