Landlords to tighten tenant checks before Renters’ Rights Act

Landlords are tightening tenant screening ahead of the Renters’ Rights Act coming into force on 1 May, with nearly seven in 10 planning more stringent checks to manage eviction risk.

Paragon Bank’s survey of 500 landlords shows 69% intend to introduce more in-depth vetting of prospective tenants.

Another 70% say they will be more selective about where they advertise their properties.

Three-quarters say they feel prepared for the new regime and 42% point to the removal of Section 21 ‘no-fault’ evictions as the change most likely to affect their business.

Also, 43% raise concerns about tenants falling into arrears or engaging in anti-social behaviour.

Landlords must adapt

The bank’s mortgage lending director, Lisa Steele, said: “The Renters’ Rights Act represents a major policy shift, and landlords are adapting their approach accordingly.

“Given the pressures expected on the courts through the change to the eviction process, landlords are understandably planning to make more expansive checks on prospective tenants as they don’t want the cost and time involved in a lengthy eviction process.”

She added: “This creates challenges for those new to the rental market who have not yet built-up a tenant reference history, as well as those with infrequent income schedules.

“This was always the challenge for the RRA; while in brings in extra protections, it could exclude some of those tenants at the periphery of the market.”

Court backlog fears

Paragon says that over the past year, 51% of landlords report at least one instance of rent arrears or a late payment.

Anti-social behaviour has been encountered by 27%, while 22% say tenants remained in a property longer than intended.

A further 18% report damage linked to pets.

Court capacity is also a worry with 65% wanting faster court processes to reduce delays.

And 39% say the number of mandatory grounds for possession should be increased.

More than half put up rents

Around 35% of landlords say they are expecting a direct financial impact from the Act.

In response, 53% say they will consider increasing rent and 37% plan to review rents more frequently.

However, 18% are looking at cost savings across their portfolios, including changes to maintenance schedules and white goods replacement.