Renters’ Rights Act could leave tenants with fewer options

Landlords look set to bring in tougher tenant checks as new Renters’ Rights Act rules ban advance rent payments of more than one month.

Research from LRG found that fewer than a third of landlords are fully aware of the restriction, while 43% know the rules have changed but remain unsure of the details.

A further 26% said the cap on advance rent payments was news to them.

The findings come from LRG’s latest Lettings Report, based on responses from 650 landlords and tenants across England and Wales.

Landlords are leaving

The chief lettings officer at Leaders, which is part of LRG, Allison Thompson, said: “The Renters’ Rights Act has some genuinely important protections for tenants, and we support the direction of travel.

“But the data should give policymakers pause.

“When more than half of landlords expect to see higher-risk applications as a direct result of removing advance rent, and 17% are considering leaving the sector altogether, we have to ask whether the rules are working as intended.”

She added: “The tenants who most need stability are the same ones who will struggle most if supply contracts further.”

Higher risk tenants

LRG says its survey suggests many landlords are still working through the practical consequences.

That includes appreciating that the Act may make access to homes harder for the renters they were designed to help.

With advance rent restricted, 58% of landlords expect to receive more borderline or higher-risk applications, including 18% who expect significantly more.

Only 10% expect the quality of applicants to improve.

Landlord behaviour is changing

The report also points to changing landlord behaviour as 38% say they are either reconsidering whether to continue letting or be more selective about who they accept.

A further 6% said they are slightly more selective.

The most common response, cited by 42% of landlords, was to rely more heavily on their letting agent to screen applicants.

LRG says professional screening is likely to become more important as landlords adjust to the new rules and reassess risk.

Where will tenants live?

LRG also raises concerns over housing options for tenants who struggle to compete in the open market.

It says 70% of landlords would not consider letting to a local council or housing association, while fewer than 1% currently do so.

Among tenants surveyed, 69% described themselves as heavily or completely dependent on the private rented sector, with no other viable option.

The report says any further reduction in available homes, or any tightening of landlord selection criteria, would be felt by tenants with the fewest alternatives.