A significant portion of landlords are considering exiting the private rented sector in response to the Tenants’ Rights Act, while many of those staying are preparing for tougher checks on tenants, according to new research.
A survey of over 900 UK landlords by LegalForLandlords found that 25% intend to leave the market as a result of the upcoming legislation. Of those who plan to stay, 60% say they will adopt stricter criteria when assessing potential tenants.
Income and affordability checks are expected to come under greater scrutiny, with over half of landlords also saying they will be placing greater reliance on rent guarantors as part of their application process.
The findings come amid concerns among landlords about the impact of reforms such as the abolition of section 21 evictions and the move away from assured shorthold tenancies, which respondents believe will increase risk.
While awareness of the Tenant Rights Act is relatively high – 77% of landlords say they understand its key provisions – confidence in its implications is low. The survey found that 63% of landlords believe the reforms will increase the level of risk associated with renting out a property.
So what exactly is causing landlord concern about the Tenant Rights Act?
For many, the issue centers on control and possession rights. 43% of landlords cite the abolition of Section 21 evictions as their biggest concern, while another 20% highlight the end of assured shorthold tenancies and their replacement with assured periodic tenancies.
Landlords are already adjusting their approach. Half of respondents (50%) say they plan to tighten tenant screening processes, while a quarter (25%) say the change is important.
According to the study, 22% would place more emphasis on income and affordability checks, 19% would prioritize previous landlord references, 16% would increase credit checks, and 16% would strengthen employment verification. Specifically, 53% say they are now more likely to need a rent guarantor.
Overall, 60% of landlords say they will be much stricter when selecting tenants, and the same proportion admit they are now less likely to rent to “high risk” applicants – such as those with low incomes or limited rental history.
While 63% of landlords say they want to continue operating as normal – albeit with tighter controls – a significant minority are rethinking their position altogether. Some 24% say they plan to sell and exit the market, while 13% intend to reduce the size of their portfolio.
Sim Sekhon, Group CEO of LegalforLandlords, commented: “It is clear from our research that many landlords are approaching the Tenants’ Rights Act with a degree of uncertainty, and given the scale of the change this is entirely understandable. For some, particularly those who have relied on more traditional routes to gain possession, this represents a significant change in how the sector operates.
“However, it is important to keep that concern in perspective. The reforms are not about removing landlords’ rights, but about reshaping them. Landlords who thoroughly screen tenants, maintain high-quality properties and take a professional approach to management are unlikely to find themselves deprived. The important thing is that there are still clear and practical routes to regaining possession, whether in response to problematic tenant behavior or where the landlord has the option to sell or repossess the property. Need to relocate.
“What is more worrying is the proportion of landlords considering leaving the sector altogether. A reduction in supply on that scale has a clear impact on the wider market, particularly at a time when demand for rental homes remains consistently strong. Inevitably, that imbalance causes rents to rise and makes it harder for tenants to access suitable accommodation. At the same time, it means that those landlords who remain in the sector are expected to experience less competition and a continued supply of well-managed rental homes. There can be profit from demand.
“As the industry adapts, the focus must be on clarity, education and confidence. With the right understanding of the new framework, landlords can continue to operate successfully within it, contributing to a more stable and sustainable rental market overall.”
Is your agency ready for this week’s Tenant Rights Act changes?