Landlords are expected to tighten tenant selection criteria as the Renters’ Rights Act 2025 comes into force, raising concerns that more renters could struggle to secure a home.
Analysis from LegalforLandlords suggests the removal of Section 21 and changes to possession rules will push landlords to take a more cautious approach to risk.
The reforms, which introduce periodic tenancies and require landlords to rely on specific grounds for possession, are expected to increase the time and cost involved in resolving disputes.
As a result, affordability and financial resilience are likely to become the primary filters in tenant selection, particularly as court delays persist and compliance requirements increase.
UNLETTABLE APPLICANTS
The report warns that a growing number of applicants could become effectively “unlettable” in practice, despite not being legally excluded from renting.
Tenants with lower incomes, irregular earnings, weaker credit histories or limited access to guarantors are expected to face greater scrutiny, particularly in higher-cost regions.
Affordability thresholds are also expected to rise, with some landlords moving from traditional benchmarks of around 2.5 times rent to three times or more, reducing the pool of eligible tenants.
At the same time, reliance on guarantors is set to increase, while tighter rules around rent in advance and more rigorous insurance underwriting could further limit options for those who fall short of standard criteria.
The shift is also likely to increase friction in the lettings process, with stricter referencing and fewer viewings per property potentially leading to longer void periods despite strong underlying demand.
RISKS AHEAD
Sim Sekhon (main picture, inset), Group Chief Executive Officer at LegalforLandlords, says: “The intention behind the Renters’ Rights Act is clear and, in many respects, necessary. It aims to create a fairer, more secure rental market for tenants.
“However, as landlords lose certain safeguards, many will look to mitigate risk elsewhere, most commonly through stricter affordability criteria.”
He adds that the challenge will be balancing tenant protections with maintaining access to the private rented sector, warning that without proportionate solutions, more renters could find themselves unable to secure a home.
