Renters’ Rights Act may shut out ‘riskier’ tenants – NRLA

Renters with poor credit records, unpredictable earnings or having nobody willing to act as a rent guarantor could face a tougher search for a home, the NRLA says.

It has carried out research which found that 78% of landlords said the Renters’ Rights Act was likely to make them more selective when choosing tenants.

The survey of NRLA members found that those affected could include people with fluctuating incomes, international students without a UK credit history or a UK-based guarantor.

Also, those tenants whose ability to pay has been squeezed by frozen housing benefit rates might struggle to find a home.

Fears over sustaining tenancy

The NRLA’s chief executive, Ben Beadle, said: “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.

“If the system makes it harder for them to seek those assurances, the result will be fewer options for those on the financial margins.”

He added: “Likewise, 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.”

Periodic tenancies are a concern

Under the Act, limits on rent paid in advance could restrict one route previously used by applicants with poor or limited credit histories to demonstrate that they could sustain a tenancy.

Most tenancies will also be open-ended under the reforms, raising another difficulty for applicants who rely on a guarantor.

The NRLA said some guarantors may be reluctant to accept responsibility for rent without a fixed end date.

Court delays are another concern for landlords surveyed, with 90% saying they were worried about the effect of backlogs when seeking possession for a legitimate reason.

Legal injustice for landlords

The NRLA said it currently takes almost eight months on average for courts to process and enforce possession cases under the system, replacing no-fault evictions, including claims involving serious rent arrears or anti-social behaviour.

Mark Evans, president of the Law Society, has warned that without sufficient investment in the courts and legal system, the Act risks creating injustices for landlords and tenants.

Mr Beadle said: “Ministers need to set clear targets in which cases should be processed and enforced, with the resources to back this up.

“Without this, the government risks undermining landlord confidence at the very moment renters need more homes, not fewer.”