## Landlords Profitable but Concerned as Renters’ Rights Act Approaches

New research from Aldermore highlights a complex picture for UK landlords. Although 85% report making a profit from their property portfolios, confidence is wavering due to the impending introduction of the Renters’ Rights Act (RRA) on 1 May 2026. Only 6% of landlords currently report losses, yet three quarters expect the legislation to have a negative personal impact, with 84% foreseeing wider harm to the private rented sector.

Jon Cooper, Aldermore’s director of mortgages, emphasises the importance of landlords understanding the Act’s implications. He states: “It’s vital that all landlords assess how the Act will impact their lettings activity, to protect themselves and ensure they’re able to continue offering a positive renting experience for their tenants.” Cooper also notes that while the sector faces challenges, landlords remain resilient, though tensions are evident regarding the Act’s potential knock-on effects.

## Key Concerns Among Landlords

Awareness of the Renters’ Rights Act is high, with only 1% of landlords unaware of the legislation. Among those informed, over 90% express concern about court backlogs delaying possession claims, a factor that could extend tenancy durations and affect cash flow. Additionally, nearly the same proportion are worried about the planned 2% increase in income tax for landlords owning property in their personal names.

In response to these challenges, approximately 84% of landlords intend to tighten tenant selection criteria, and 72% anticipate raising rents to offset increased costs and risks. However, the research also signals a cooling rental market, with rental yields expected to fall to their lowest level in five years. Reports of strong tenant demand have decreased by 7% from the previous quarter and 16% compared with a year earlier.

## Commercial Reality Check: Profitability vs Confidence

The research underscores a disconnect between profitability and confidence. While 85% of landlords remain profitable, three quarters feel threatened by the legislative changes. This tension is critical, as market hesitation can have more immediate consequences than regulation itself. The Renters’ Rights Act does not eliminate profit opportunities but increases the cost of poor management, disorder, and inadequate asset selection. The sector is not in crisis but is undergoing rapid maturation.

## Practical Steps for Landlords to Prepare

Landlords are advised to take proactive measures to safeguard their portfolios in the post-RRA environment:

– **Model Post-RRA Financials:** Stress test each property considering longer possession timelines, increased compliance requirements, and slower cash flow. If a property remains viable on paper, confidence will follow; if not, it signals the need for reassessment.

– **Audit Tenant Risk Professionally:** Tightening tenant selection is sensible but should be done systematically. Standardise affordability assessments, references, and guarantor policies to ensure decisions are consistent and defensible.

– **Prioritise Balance Sheet Resilience:** With court delays likely, maintaining cash reserves equivalent to several months of portfolio costs is essential. Landlords with liquidity will be better positioned to weather delays and challenges.

– **Refinance Strategically:** Review loan terms, expiry dates, and covenants at least 12 months in advance. Even small improvements in interest rates can compound into significant financial protection across a portfolio.

These steps aim to help landlords maintain profitability and stability despite the uncertainties introduced by the Renters’ Rights Act.