Half of agents more cautious recommending tenants after Renters’ Rights Act
More than half of letting agents are exercising increased caution when recommending tenants following the Renters’ Rights Act. This shift reflects a tightening of tenant selection amid new tenancy rules affecting landlords and agents.
The Renters’ Rights Act has prompted 51% of letting agents to be more cautious in recommending tenants compared to last year, according to early data from Goodlord’s 9th State of the Industry Report. The research, surveying 3,000 agents, landlords, and tenants, reveals that 26% of landlords are now more likely to reject applicants they would previously have accepted. Additionally, nearly a third of landlords prefer to keep properties vacant rather than accept higher-risk tenants.
This increased scrutiny follows major changes including the abolition of Section 21 ‘no-fault’ evictions, restrictions on rent payments in advance, and a ban on over-bidding for rental properties. These reforms have altered the risk landscape for landlords, influencing their willingness to accept tenants with less conventional profiles.
Goodlord research highlights cautious tenant selection trends
The Goodlord report’s initial findings indicate that landlords and agents are responding to the Renters’ Rights Act by tightening tenant vetting criteria. William Reeve, CEO of Goodlord, points out that the unintended consequences of the Act are becoming apparent. He warns that certain groups—such as students, foreign nationals, and those with non-traditional income sources—may find it increasingly difficult to secure tenancies. These groups risk becoming marginalised in a market that is more risk-averse.
Despite this caution, the report also notes a reduction in overall pessimism among agents compared to the previous year. The Sentiment Index, a new feature of the report compiling four years of data, shows agent pessimism has dropped from 48% to 40%. Larger agencies with more than 11 staff members tend to be more optimistic (42%) than smaller agencies with five or fewer staff (28%).
Landlord sentiment remains more negative, though it has improved slightly. Sixty-nine percent of landlords express pessimism, down from 78% in 2025. Larger landlords with six or more properties are more pessimistic (81%) than those with only one property (63%). Tenants, particularly younger ones aged 18-34, are showing increased optimism, with 37% overall feeling positive about the lettings market compared to 20% last year.
Contextualising the impact of the Renters’ Rights Act on tenant recommendation
The Renters’ Rights Act represents a fundamental reform of tenancy law in England, removing Section 21 ‘no-fault’ eviction notices and imposing stricter controls on rent payments and bidding practices. These changes aim to enhance tenant security and fairness but have shifted risk considerations for landlords and agents.
Without the ability to regain possession easily through Section 21, landlords face greater challenges in managing problem tenants or ending tenancies without cause. This has led to a more cautious approach in tenant selection to mitigate the risk of prolonged problematic tenancies. The ban on rent payments in advance and over-bidding further limits landlords’ financial safeguards, increasing their reliance on thorough tenant vetting.
Agents and landlords are therefore adapting their practices, often preferring to leave properties vacant rather than accept tenants perceived as higher risk. This cautious stance can reduce the pool of eligible tenants, particularly affecting those with less conventional income streams or immigration status, who may struggle to provide traditional references or guarantees.
Practical effects for landlords and letting agents
For landlords and agents managing small portfolios, these developments mean tenant vetting processes must be more rigorous and documentation more comprehensive. Enhanced referencing, income verification, and guarantor checks are becoming standard to reassure landlords of tenant reliability.
Letting agents may need to communicate more clearly with landlords about the risks and benefits of accepting certain applicants, balancing the desire to avoid void periods with the need to minimise default risk. Landlords should review their tenant acceptance criteria and consider the implications of leaving properties empty versus accepting tenants with non-traditional profiles.
Additionally, the cautious market may increase competition among tenants who meet stricter criteria, potentially leading to longer voids for landlords unwilling to accept higher-risk applicants. Agents should prepare landlords for this dynamic and explore ways to support tenants who might otherwise be excluded, such as offering rent guarantor services or flexible payment options where permitted.
Ongoing uncertainties and considerations
The full impact of the Renters’ Rights Act is still unfolding, and some uncertainties remain. It is not yet clear how courts and tribunals will interpret and enforce the new tenancy rules over time, which may affect eviction processes and landlord rights. The market’s response to these changes may also evolve as landlords and agents gain more experience under the new regime.
There is also the question of how these trends will influence overall rental supply. Increased caution among landlords could lead to more properties exiting the market, exacerbating housing shortages. Conversely, improved tenant security might encourage longer tenancies and reduce churn.
Landlords and agents should keep abreast of official guidance and case law developments, as well as monitor tenant demand and behaviour. They should also be alert to potential legislative amendments or policy shifts that could adjust the balance of rights and responsibilities in the private rented sector.
Steps landlords should take now
- Review tenant vetting and referencing processes to ensure compliance with current regulations and best practices.
- Consider the financial and operational implications of leaving properties vacant versus accepting tenants with non-traditional income or backgrounds.
- Stay informed about evolving legal interpretations of the Renters’ Rights Act and related tenancy law changes.
- Engage with letting agents to understand market sentiment and tenant demand trends in your local area.
- Explore support options for tenants who may face difficulties securing tenancies, such as rent guarantor schemes or alternative referencing.
Supporting landlords with compliance and tenant management
The Landlord Association (TLA) offers resources to help landlords and letting agents adjust to the new tenant recommendation landscape. Through TLA membership, landlords can access up-to-date compliance information and practical guidance on tenant vetting and tenancy management under the Renters’ Rights Act.
TLA’s new property management and compliance platform, ORBIT, currently available in BETA testing, is designed to assist members in organising tenancy documents, recording tenant references, and monitoring compliance activities. ORBIT’s tools aim to streamline the management of tenant applications and support evidence retention, crucial under the tightened tenant scrutiny environment.
Membership also provides access to TLA’s compliance resources and expert updates, helping landlords and agents stay informed about ongoing regulatory developments and best practice approaches to tenant risk assessment.
Explore TLA membership and learn more about ORBIT BETA access to strengthen your tenant management processes in this changing market.
Looking ahead, landlords and agents will need to balance cautious tenant selection with maintaining rental income and occupancy. Keeping informed and adapting practices will be essential to managing risk and sustaining portfolios under the evolving tenancy framework.
Sources: Letting Agent Today
TLA - The Landlord Association