Landlords tighten tenant checks as costs rise
8:59 AM, 28th July 2026, 3 weeks ago
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Landlords are raising rents and becoming more selective about tenants as operating and regulatory costs climb, according to new research.
Some landlords are also putting property improvement work on hold, even while preparing to buy more properties.
Handelsbanken surveyed 200 UK property investors, landlords and property management professionals for its fifth annual Property Investor Report.
It found that 63% had increased rents because of higher overall costs.
Tenant rights bring higher costs
Handelsbanken’s chief economist, James Sproule, said: “The private rented sector is not simply becoming more expensive for landlords to operate; it is becoming more selective.
“Higher costs and greater tenant rights are feeding into rent decisions, but they are also changing how professional investors think about tenant risk, affordability and long-term portfolio planning.
“For renters, that means the challenge may not only be what they pay each month, but how competitive the market feels when trying to secure a suitable home or addition to their portfolio.”
He added: “Higher standards and stronger tenant protections are intended to improve the rental sector over the long term.
“But they also come with real costs, and our research shows professional investors are already adapting their behaviour in response.”
Most tighten tenant selection
In response to the Renters’ Rights Act, 59% said they were tightening their selection criteria, while 44% were considering increasing rents earlier than planned.
Maintenance and repairs were the most frequently reported cost increase over the past 12 months, cited by 45% of respondents.
Insurance costs had risen for 41%, while 40% pointed to spending on energy efficiency improvements.
One in five investors said they had sold properties because of rising costs, while 19% had taken homes out of the private rented sector.
Another 46% had delayed upgrades or improvement work.
Cost of the RRA
The median cost reported for complying with the Renters’ Rights Act was £5,000, although the mean stood at £31,411.
Respondents expected a median annual compliance and improvement bill of £20,000 during the next 12 months.
Handelsbanken said the figure related to spending across professional portfolios and should not be treated as the likely increase for an individual tenant.
Despite the sales and withdrawals reported by some respondents, 84% said they intended to increase the size of their holdings during the next 12 months.
That compares with 54% in Handelsbanken’s 2025 survey.
Tags:
landlord costs, landlord portfolios, property investors, rent increases, Renters’ Rights Act, tenant checks
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Member Since May 2018 - Comments: 2397
10:41 AM, 28th July 2026, About 3 weeks ago
This was always entirely predictable and labour were warned that this would happen.
The Labour Renters Rights Act is putting up market rents.
It also makes some tenants too high risk to house.
Member Since February 2011 - Comments: 3462 - Articles: 286
9:41 AM, 29th July 2026, About 3 weeks ago
Response from Handelbanken upon a reader questioning the statistics:
“Thanks for raising this. We have now checked the underlying responses, and your interpretation is correct.
Across all 200 respondents, the median reported cost was £5,000 and the mean was £31,411.20. The standard deviation was £120,913, with responses ranging from £0 to £1.2 million.
The difference is being driven by a relatively small number of very high estimates at the upper end of the sample. The five largest responses were £1.2 million, £1 million, £555,422 and two responses of £250,000.
By comparison, 18% of respondents reported costs of £25,000 or more, 13.5% reported £50,000 or more and 8.5% reported £100,000 or more. The most common individual response was £5,000.
The median should therefore be viewed as the better indication of the typical reported cost, while the mean reflects the fact that some respondents, potentially those managing larger portfolios or more complex operations, reported substantially higher figures.
It is important to note that the survey did not ask respondents to explain the individual costs included in their estimate or why their figure was particularly high, so we should not attribute the larger responses to any specific expense or type of business.
Member Since December 2023 - Comments: 1651
9:58 AM, 29th July 2026, About 3 weeks ago
The bottom line is that some landlords are selling. This may be masked in official figures because of the rise of the HMO where each room may be counted as one residence.
Landlords with the poorest housing, often housing the poorest tenants, face the greatest financial burden/risk from RRA25.
It is likely that the cheapest houses will be sold and this will increase the average rent. Those displaced tenants, being the poorest tenants, will be competing with wealthier tenants for better houses. Landlords will always choose the best tenants.
Member Since May 2018 - Comments: 2397
10:07 AM, 29th July 2026, About 3 weeks ago
Reply to the comment left by Cider Drinker at 29/07/2026 – 09:58
This is true. Just as when you increase employers national insurance, drop the level at which it is paid and propose that everybody gets employment rights on day one this has a disproportionate effect on the workers on the margins, the Labour Renters Rights Act in eliminating no-fault evictions without fixing the other problems in the market also disproportionately affects tenants on the margins.
But in addition to making some tenants too high risk to house, the effect of the Labour Renters Rights Act will be to increase costs and market rents.
Member Since October 2022 - Comments: 250
5:12 PM, 29th July 2026, About 3 weeks ago
As far as expectations go that renting will be so much better for tenants with so many more rights at no extra cost, the words “cake” and “eat it” come to mind. And also Cloud Cuckoo-Land.
Member Since May 2018 - Comments: 2397
5:31 PM, 29th July 2026, About 3 weeks ago
Absolutely correct….the Labour Renters Rights Act increases the cost of renting, but more than that, it makes some properties too much of a risk to rent out, and many more tenants too risky to house. The restrictions on advertising also mean that all landlords and their agents now have to advertise for the maximum possible rent and this pushes market rents up in the private rental sector.
When government interferes in a market and reduces competition it doesn’t necessarily make anything better.
Member Since November 2025 - Comments: 17
7:59 AM, 1st August 2026, About 2 weeks ago
I am surprised that, particularly in properties where local councils are.the freeholders, sharp increases in service charge costs haven’t been mentioned. Similarly, licensing.
Member Since May 2018 - Comments: 2397
10:20 AM, 3rd August 2026, About 2 weeks ago
Reply to the comment left by Simon Kinzley at 01/08/2026 – 07:59
I do wonder whether local councils as well as social housing providers and providers of housing for asylum seekers are all going to be expected to register the houses they are looking after on the labour landlord database.
There isn’t a public register of tenants but what the Labour Renters Rights Act is going to do is create massive databases of tenant information held in the private sector. I cannot see any point in the Labour Landlord database as it seems to me to be only able to do what the Land Registry should be doing. I do wonder though whether there could be some value in doing something more with the electoral role system in the PRS given that we have to carry out right to rent checks anyway.