The Renters’ Rights Act could accelerate the shift towards a more professionalised private rented sector as rising compliance demands reshape landlord behaviour.
New insight from Rushbrook & Rathbone suggests that while regulatory pressure is increasing, underlying market performance remains relatively stable.
Average rental income per property has risen from £9,860 to £11,352 over the past year, while yields have edged up from 6.3% to 6.4%.
At the same time, the proportion of landlords reporting arrears has fallen from 29% to 27%, pointing to improving tenant stability despite wider economic pressures.
PORTFOLIO CONTRACTION
However, the data also highlights a contraction in portfolio sizes, with the average number of properties held falling from 7.3 to 6.6. More landlords are opting to sell rather than expand, reflecting the growing cost and complexity of operating in the sector.
The changes come as the Renters’ Rights Act prepares to overhaul tenancy structures, including the abolition of Section 21 ‘no-fault’ evictions, the move to periodic tenancies, and the introduction of a new ombudsman and landlord database.
Rushbrook & Rathbone argues that, while these reforms present challenges, they may ultimately favour professional landlords with the systems and processes in place to adapt.
SECTION 8 BENEFITS
Clearer possession grounds under Section 8 are expected to create a more evidence-based framework for regaining properties, particularly in cases involving arrears or anti-social behaviour.
At the same time, the shift to periodic tenancies could reduce tenant churn and void periods, supporting more consistent income.
Extended notice periods and the introduction of a property ombudsman are also expected to improve planning and speed up dispute resolution, reducing reliance on the courts.
In the longer term, increased transparency and standardised compliance requirements are likely to raise overall standards across the sector, potentially squeezing out smaller or less compliant operators.
PROFESSSIONAL RENTAL MARKET
Roma Sharma, Managing Director of Rushbrook & Rathbone, says: “While the Renters’ Rights Act is understandably being viewed as a challenge by many landlords, it also represents a shift towards a more structured and professional rental market – in theory.
“What we are likely to see is a widening gap between those landlords who are well prepared, well managed and fully compliant, and those who are not.
POSESSION CLARITY
And she adds: “For professional landlords, greater clarity around possession, improved dispute resolution, and a more transparent regulatory framework can actually provide a more stable operating environment over the long term.
“At the same time, the increased complexity of the sector means that managing property is becoming far more operational and compliance-driven than it has been in the past.
“As a result, professional management is no longer simply about convenience, it is increasingly about ensuring that landlords remain compliant, protect their income, and are able to operate effectively within a rapidly evolving regulatory landscape.”
