Landlords are implementing stricter tenant selection criteria following the introduction of the Renters’ Rights Act this month, according to new research from the National Residential Landlords Association (NRLA).
A survey of 630 landlords conducted just before the Act came into force revealed that 78% expect to become more selective about prospective tenants. The findings suggest particular challenges ahead for renters with poor credit histories, fluctuating incomes, or limited access to guarantors.
Market implications
Ben Beadle, Chief Executive of the NRLA, stated: “Today’s findings paint a worrying picture for many renters and serve as an important reminder that reforming the private rented sector comes with considerable risk. Responsible landlords need confidence that tenants can sustain a tenancy.”
The Act introduces several changes affecting landlord-tenant relationships. New restrictions limit the amount of rent that can be charged in advance, which the NRLA says will make it more difficult for those with poor or no credit history to demonstrate their ability to sustain a tenancy.
Additionally, the legislation makes the majority of rental agreements open-ended, potentially complicating the process for tenants seeking guarantors for indefinite commitments. This shift in the rental landscape follows recent patterns of weaker demand across UK housing markets.
Court system concerns
The survey also revealed widespread concern about practical implementation challenges. Some 90% of landlords expressed worry about the impact of court backlogs when seeking to repossess properties.
Beadle added: “The Government’s failure to publish a clear plan to ensure the courts process legitimate possession cases far quicker than at present is causing considerable concern in the sector.”
The findings indicate that regulatory changes intended to protect renters may inadvertently create barriers for those already facing challenges in securing rental accommodation. Industry observers note that these developments could reshape tenant demographics in the private rental sector, with potential knock-on effects for institutional landlords and investment strategies in the buy-to-let market.
