A quarter of landlords plan to exit the market as a result of the Renters’ Rights Act, while 60% of those who remain intend to get stricter with tenant vetting, according to a survey of 900 landlords by LegalforLandlords.
The survey found that income and affordability checks are set to face greater scrutiny, with more than half (53%) of landlords saying they will place greater emphasis on requiring rent guarantors after the first phase of the act comes into force on May 1.
Nearly eight in ten (77%) of landlords said they were familiar with the ins and outs of the new act, but six in ten (63%) believe it will expose them to higher risk.
43% said that their biggest area of concern is the abolition of Section 21 ‘no fault’ evictions. Meanwhile, 20% are most concerned about the banning of Assured Shorthold Tenancies, which will be replaced by Assured Periodic Tenancies.
Strengthened income and affordability checks
22% plan to strengthen income and affordability checks, while a similar amount (19%) plan to increase their reliance on references from previous landlords. Increased use of credit history checks (16%) and employment verification (16%) are other tactics planned by landlords.
While 60% of landlords say they are going to be much stricter when choosing which tenants they allow into their properties, the same amount also admit they are now less likely to let to ‘high risk’ tenants, such as those who are on lower income, or have a limited rental history.
While 63% said they will continue renting as normal – albeit with a greater level of vetting and scrutiny – a quarter (24%) are explicit about their plans to sell their properties and exit the market altogether. A further 13% say they are reducing the number of properties in their portfolio.
A significant shift
Sim Sekhon, group CEO at LegalforLandlords, said: “It’s clear from our research that many landlords are approaching the Renters’ Rights Act with a degree of uncertainty, and that’s entirely understandable given the scale of change being introduced. For some, particularly those who have relied on more traditional routes to regain possession, this represents a significant shift in how the sector operates.
“However, it’s important to keep that concern in perspective. The reforms are not about removing landlords’ rights but reshaping them. Landlords who carry out thorough tenant vetting, maintain high-quality properties and take a professional approach to management are unlikely to find themselves disadvantaged. Crucially, there are still clear and workable routes to regain possession, whether in response to problematic tenant behaviour or where a landlord needs to sell or move back into a property.”
