Landlords raise rents after Renters’ Rights Act implementation

More than a third of landlords have increased rents in response to the Renters’ Rights Act, a survey reveals.

Tenants’ finances have also come under closer scrutiny, with 34% of respondents changing their referencing or affordability requirements.

Buy to let lender Landbay found that 53% believed the legislation had negatively affected their businesses since its main measures took effect in May.

Its Q3 survey, sent to more than 2,000 landlords, also found that 16% had increased their use of letting agents or other professional support.

Rents and tenant checks

Landbay’s sales and distribution director, Rob Stanton, said: “We are beginning to understand how landlords have responded to the changes, with more than half reporting a negative impact on their businesses.

“Perhaps more telling is the number who have already increased rents, changed tenant requirements or reconsidered their plans to buy and sell properties.”

He added: “These are not simply concerns about what might happen in the future.

“Landlords are already making practical decisions based on the requirements they now face, although the impact will inevitably differ depending on individual circumstances and portfolio structures.”

Landlord registration costs

The upcoming landlord database registration requirements were another focus of the survey, which asked landlords how the service could affect their businesses.

Almost two-thirds (65%) expected their costs to rise.

For 44%, registration was also likely to mean spending more time managing their properties.

A further question on rents found that 38% believed the requirements could prompt them to increase them where possible.

Property investment plans

Asked about changes they had made because of the RRA, 33% said they had decided to sell or were considering selling properties, while 29% had reduced plans for further purchases.

Registration could also influence those decisions: 33% said it could make them less likely to buy additional properties and 26% thought it could make them more likely to sell.

However, 28% reported making no significant changes to their businesses in response to the Act.

Others had put more money aside to cover costs, a step taken by 13% of respondents.