The Renter’s Rights Act could disadvantage vulnerable tenants, according to Louisa Sedgwick, head of mortgages at buy-to-let lender Paragon.
Speaking on the latest episode of Housing Unpacked, 10 days before the law comes into effect, she said landlords would screen tenants more cautiously before they move in as a result of the new rules.
Louisa has been involved in lobbying the government to help shape the legislation.
Paragon is a FTSE250 company with a £14 billion mortgage loan book and 47,000 landlord customers.
MORE DUE DILIGENCE
“I think what will happen without a shadow of a doubt, and you are already seeing this, is that the due diligence that landlords will do on any new tenant will be significantly higher than it has been in the past,” she said.
“A tenant can now no longer pay rent in advance, and that might have been a way to secure a property if they had a previous poor credit history or they weren’t working or relying on universal credit.
“We’ll see more vulnerable tenants not being able to secure properties as a result of the Renters’ Rights Act.”
The new rules, which are introduced on 1 May, cover a range of issues, the full details of which can be found here. They include the setting of rents, repossession rules, restrictions on selling and pets.
LANDLORD OBSTACLES
The new Act is the latest in a series of obstacles that have faced landlords in recent years, which have included higher rates of stamp duty and the ending of tax breaks.
As a result, more landlords have sold up, which has pushed supply lower and rents higher in many areas including London, where renting is most prevalent in the UK.
The number of listings in prime central and outer London in Q1 2026 was 15% below the five-year average, Rightmove data shows.
“There is absolutely a move towards hobby landlords leaving the sector,” said Sedgwick. “It just becomes harder, and I think this is kind of the point where landlords say, unless I’m going to do this either as a full-time role or certainly concentrate and focus time and effort on making sure that I can make this a viable business, then I’m actually going to move out of the sector.”
In the year to March, rental values in prime central London (PCL) rose by 1.2%, which takes the total increase over the last decade to 29%. In prime outer London, the annual increase was 2.8%, producing a rise of 24% since 2016.
For those landlords remaining, the good news is that average yields have increased notably, particularly given the recent price weakness in the sales market. The average gross yield in PCL was 4.6% in March, which compares to 2.9% ten years ago.
GOVERNMENT LOBBYING
Sedgwick also talks about her role lobbying the government as the new legislation went through Parliament, including her work with industry bodies such as the National Residential Landlords Association, UK Finance and the Bank of England Property Forum.
Asked whether the government listened to the concerns of the industry, she said: “I think with some individuals, yes.”
And how was it dealing with a Labour government compared to the Conservatives?
“My feeling was that this was in the Labour Party manifesto, and as such, they were going to implement it. So, regardless of whether or not they understood and were listening, I think that they’d reached the point where there was just no going back on this particular change in legislation.”
That said, Louisa has become more positive in recent years that the new rules won’t prove too disruptive. Listen to the podcast to hear why.
THE EPC HURDLE
We also discuss the recent volatility in the mortgage market, but a bigger obstacle coming down the line is the Minimum Energy Efficiency Standard rules, which mean landlords will need to ensure their properties have an EPC C rating by 2030.
“This particular change in legislation I think is going to be bigger and potentially more demanding because I don’t believe we’ve got the infrastructure to support it,” said Sedgwick.
“We’re talking 1,800 properties per day that will need to be upgraded by October 2030. We don’t have the tradespeople because they’re busy building the 1.5 million homes that have been committed to from this government.”
The raft of new regulations means the lettings sector should look different in ten years’ time, she said.
“You’ve seen the move towards larger apartment blocks with concierges and gyms that have been built by insurance and investment companies,” she said.
And her overall impression? “It is going to be a community of landlords that do this as part of their everyday roles as opposed to doing this just as a hobby or off the side of the desk.”
