Landlords adapting to Renters Rights Act regime with rent and strategy changes

Landlords adapting to Renters Rights Act regime with rent and strategy changes

A recent survey of 2,000 landlords reveals many are adjusting rents, tenant checks, and investment plans in response to the Renters Rights Act. The study also highlights mixed preparedness for upcoming landlord registration requirements.

A year after the Renters Rights Act’s provisions were unveiled, landlords are already making operational changes. According to research by mortgage lender Landbay, 36% of landlords have increased rents, 34% have tightened tenant referencing or affordability criteria, and 16% have increased their use of letting agents or professional support. These adjustments reflect landlords’ efforts to manage the new legal environment and associated risks.

The study also indicates that the Act is influencing landlords’ broader investment decisions. Around one-third (33%) of respondents have sold or are considering selling properties, while 29% have reduced plans to acquire additional rental units. This suggests the legislation is prompting some landlords to reconsider the scale and scope of their portfolios.

Impact of specific Renters Rights Act provisions on landlord practices

Landlords identified the abolition of Section 21 eviction notices as the most significant change, with 32% citing it as having the greatest impact on their business. Other notable changes include modifications to possession grounds (14%) and the introduction of periodic tenancies replacing fixed terms (15%). These legal shifts have practical consequences for landlords’ ability to regain possession and manage tenancies, prompting changes in how they approach tenant selection and property management.

Financially, 13% of landlords reported setting aside more funds to cover increased costs, while 28% stated they had not made significant changes. This variation reflects differing portfolio sizes, landlord experience, and risk tolerance. The increased reliance on letting agents by some landlords may also indicate a preference for professional management to navigate the evolving regulatory framework.

Landlord registration awareness and expected effects on costs and management

The survey also explored landlords’ awareness of the forthcoming national landlord registration scheme. Over 90% knew a registration system was being introduced, but understanding of the requirements was less certain. Seventeen percent admitted to awareness without full comprehension, and another 17% knew of the register but not its details.

When asked about the likely impact, 65% anticipated increased costs, and 44% expected to spend more time managing properties. More than a third (38%) believed registration could lead to rent increases, while 33% thought it might reduce their willingness to purchase new properties. Additionally, 26% considered it could increase their likelihood of selling. Only 12% foresaw little or no impact, indicating widespread expectations of operational and financial adjustments.

In terms of preparedness, 59% felt very or quite prepared for landlord registration, but 24% felt unprepared, and 17% were uncertain due to insufficient information. This indicates a need for clearer guidance and support as the registration scheme approaches.

Contextualising landlord responses to the Renters Rights Act

The Renters Rights Act represents one of the most significant reforms in the private rented sector in recent years, aiming to improve tenant security and rights. Its abolition of Section 21 “no-fault” evictions and the introduction of more robust possession grounds have shifted the balance towards tenant protection. However, these changes also increase landlords’ responsibilities and potential risks, especially regarding possession and rent arrears.

Landlords’ responses, as reflected in this study, demonstrate a pragmatic approach to managing these risks. Increasing rents and tightening tenant referencing are typical risk mitigation strategies. The increased use of letting agents suggests landlords seek professional expertise to comply with new legal requirements and manage more complex tenancy arrangements.

The consideration by some landlords to sell or limit portfolio growth may reflect concerns about profitability and regulatory burden. This could have wider implications for rental supply and market dynamics, potentially reducing available rental stock if landlords exit the sector or slow investment.

Practical implications for landlords and letting agents

For landlords, the findings underline the importance of reviewing rental pricing strategies in light of increased costs and regulatory demands. Tightening tenant affordability checks may reduce risk but could also limit the tenant pool. Balancing compliance with fair access remains a challenge.

Letting agents may see increased demand for their services as landlords seek support with compliance, tenant referencing, and tenancy management. Agents should prepare to advise clients on the evolving legal landscape, including the implications of periodic tenancies and possession grounds.

Landlords should also prepare for the landlord registration scheme by understanding the requirements and ensuring their portfolios and documentation are compliant. Early preparation can help avoid penalties and reduce administrative burdens when the scheme launches.

Uncertainties and areas to monitor

While the survey provides insight into current landlord behaviour, some uncertainties remain. The full impact of the landlord registration scheme will depend on its final design, enforcement approach, and associated costs. Changes in government policy or further legislative amendments could also affect landlord obligations.

Market responses, such as rent increases or reduced investment, may vary regionally and by landlord type. Monitoring these trends will be important for understanding the broader sector impact. Landlords should stay informed of official guidance and seek professional advice tailored to their circumstances.

What landlords should consider now

• Review and update tenant referencing and affordability assessments to align with new legal standards and risk appetite.
• Assess rent levels to ensure they reflect increased costs and market conditions without pricing out responsible tenants.
• Prepare for landlord registration by gathering necessary documentation and understanding compliance obligations.
• Consider the benefits of professional letting agent support to manage regulatory complexity and tenant relations effectively.
• Stay updated on government announcements and official guidance regarding the Renters Rights Act and landlord registration.

Supporting landlords through regulatory change with TLA

The Landlord Association (TLA) offers members access to detailed compliance resources and practical guidance tailored to the Renters Rights Act and upcoming landlord registration. Through TLA’s BETA testing platform ORBIT, landlords and letting agents can organise property records, manage tenancy documentation, and track key compliance actions in one place. ORBIT’s developing AI assistant is designed to help users stay on top of regulatory changes and maintain evidence of compliance activity.

Membership also provides updates on legislative developments and expert advice to support landlords as they adapt their business practices. Exploring TLA membership and ORBIT BETA access can help landlords prepare effectively for the evolving regulatory environment.

Looking ahead, landlords who engage proactively with these changes and utilise available support tools will be better positioned to manage risks and maintain sustainable rental businesses under the Renters Rights Act regime.

Sources: Landlord Today