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

“May”
🤣

This article is correct.

The Labour Renters Rights Act makes higher risk tenants even higher risk than they were before. This article says that this could affect people with fluctuating incomes, international students without a UK credit history or a UK-based guarantor. The effect of the Labour Renters Rights Act ban on taking rent upfront means that some people who have assets but not either income, or evidence of income (such as some pensioners), who fail credit referencing as a consequence, may find it difficult to find accommodation because of the Labour Renters Rights Act.

When it comes to credit-referencing the truth is that even if you have either 2 or 3 recent payslips from a tenant that tenant could still lose their job in three months time and struggle to pay. Self-employed people have fluctuating income and normally declare it on a SA302 form. If you had to apply for a mortgage as a self-employed person the finance company would normally require two years of SA302s.

As a landlord, The Labour Renters Rights Act prevents you from taking rent upfront, stops you taking more than the advertised rent, obliges you to quote a rent IF you advertise, prevents you from ‘discriminating’ and also makes it illegal for either you or your agent to withhold information on the availability of a property. The Labour Renters Rights Act is NOT soft touch regulation in any way. It stops you making subjective judgments about people such as….I think these nice retired people with savings will pay me….I think this person with a job is hard-working, qualified, and might get another if he lost it. But the consequence of labour introducing heavy-handed regulation into a private market whilst not doing very much about social housing are that much more stringent credit-referencing checks now have to be applied to ALL tenants to avoid the problem tenants whilst simultaneously avoiding any form of discrimination.

These higher costs have to be passed on as higher rents. In effect the Labour Renters Rights Act means that you have to treat tenants as if they were applying for a mortgage, or as if they were commercial tenants. And the requirements not to discriminate or withhold details of property availability mean that you need to apply these measures to ALL tenants.

In addition, because the RRA increases risk for landlords whilst removing some of the measures you might have used previously to mitigate risk (e.g. rent up front), or a no-fault eviction, one of the things that you have to consider IF you take a tenant on having subjected ALL tenants to credit referencing to screen out the higher risk tenants is what do I then do IF the tenant still doesn’t pay? What details would I need to have to either (a) have sufficient details to provide to a debt collector to have a good chance of recovering the debt (b) what information would I need to have to SELL the debt on, (c) relevant to (a) and (b), what evidence would I need to have to verify that a tenant was worth pursuing for the debt?

As a landlord you already have to make right to rent checks. So thinking about the additional details you need in response to the Labour Renters Rights Act I think that would be:

1. Two forms of photo ID such as passport and drivers licence
2. Evidence of savings sufficient to cover a years worth of rent in a UK bank account or savings account (or more if it is taking longer than 1 year to recover properties via the courts).
3. A recent telephone contract showing normal residential address.
4. Two recent utility bills showing normal or recent address.
5. If self-employed last two years of SA302s.
6. If employed, last two years tax returns.

You might also consider evidence of professional qualifications (doctor, plumber, electrician) using a guarantor with both evidence of the above and some kind of robust obligation to pay you. If you had all the above in addition to a robust rental agreement, evidence that you had sent the Labour Renters Rights Act Information Sheet and evidence of the normal safety checks etc. then you’d probably be able to pass the debt on to a debt collection agency.

But all these extra costs and risks imposed by the Labour Renters Rights Act will do nothing to improve the availability of accommodation and will create upward pressure on rents.

Other mitigating measures you can consider are:

(1) Use an agent with lots of prospective tenants on their books to do the screening for you (the Labour Renters Rights Act does very little for tenants but is a gift for agents), AND
(2) If you don’t have to advertise then DON’T because you will have to quote a PCM rent if you do.
(3) But IF you advertise a PCM rent then advertise VERY HIGH because this decreases your risk. And IF you advertise, when you advertise, make it clear that there will be very stringent credit-referencing checks.

What amazes me is not that 78% would be stricter in tenant selection as a result of RRA, but that 22% would apparently not be. You’ve got to be a bit mad not to be more selective and careful, because a world of nightmares awaits if you end up with a defaulter. It was bad before, but it would be excruciating now.

Surely the NRLA should be advising that any responsible landlords NOT to take riskier tenants.

As an organisation that tries to make out they support and represent good landlords they would be failling if they didn’t!

I’ve been saying this for a couple of years now (since the RRA was first mooted under the Tories). Tenants without a rock solid job/income bringing in 40+ times the monthly rental, impeccable credit record, glowing previous Landlord references and a home owning guarantor will be at the back of the queue.

Reply to the comment left by Lordship at 12:35
The Labour Renters Rights Act says that neither you, nor your agent can discriminate against tenants, or withhold information on availability of a property. The only thing that a landlord can do to avoid high-risk tenants is to impose more stringent credit referencing upon ALL tenants, in order to avoid discrimination.
More than two decades ago I used to take benefits tenants. I stopped when I found out that even if I insisted on the tenant paying me directly, the housing benefits people might still come after me as the landlord to recover the money if they found out that the tenant was not eligible for benefits. But as the landlord, I had no powers to find out whether the tenants were eligible. And without exception, I found out from the mail I received when my benefits tenants left that they all had other sources of income besides their benefits. Most benefits tenants do have other sources of income besides benefits, especially in the workplace-based benefits era and with the benefits bill at an all-time high.
So in the Labour Renters Rights Act era, the only thing that you can legally do as a landlord is to subject all tenants to more stringent affordability checks, including either last two years of self-assessment tax returns or last two years of SA302. That way, with benefits tenants you either know they cannot afford the property and you can exclude them without having discriminated; or you have the evidence of declared income and if the housing benefits people do then come after you the money that you received COULD have come from their other income sources and they are not necessarily entitled to get it back off you – especially if you have carried out reasonable checks that you have applied to all tenants without discrimination. Although in reality, if you ask for all the other details above when providing information on property availability (which you must because under the Act you cannot withhold it) as part of your credit referencing process the chances are that the benefits tenants are not going to apply because they will know they will not get the property.
As for how you do this, the Labour Renters Rights Act does not oblige you to advertise a property, but it does say that if you advertise, you must include the amount of the rent. But the Labour Renters Rights Act says that this does not apply to a sign on a property that says a property is to let.
So if your agent puts up a sign on your property saying TO BE LET SUBJECT TO CREDIT REFERENCING with the agency contact details but no price, that does not breach the Labour Renters Rights Act. And your agent can then filter out the tenants you do not want. And if the agent says in general communications we have 3 bed semidetached properties in the [postcode] area subject to credit referencing and applies the same credit referencing criteria to all tenants then the agent will have provided information on availability to everybody, without discriminating, and will be able to weed out problem tenants.
The Labour Renters Rights Act is an absolute gift for agents. Property agents are the people who benefit from it the most. Most tenants will not benefit from the Labour Renters Rights Act, they will just pay higher rents because of it. In fact, agents benefit so much it causes me to wonder just how many labour MPs have shares in agents, or are renting out properties via agents.

Rents will be priced as such for “New Tenants” so as to exclude those riskier tenants.

Reply to the comment left by Lordship at 28/05/2026 – 14:50
They will, and ALL tenants will have to pay a higher price because of unnecessary, additional costs being imposed upon them via the Labour Renters Rights Act. This is because in effect the Act requires additional costs in relation to the smaller number of high-risk tenants that generate most of the risk and cost, and who of course will not pay them. The good tenants will pay in higher fees, recovered the only possible way, via rents.

Rents will go up because of the Labour Renters Rights Act, competition will be driven out.

Reply to the comment left by Beaver at 28/05/2026 – 14:54
In London the rents are already high and agents don’t wish to put it it higher than the last 2 years. If all the properties are advertised as last year’s rent by agents, there is a reason. The agents say that the tenants can’t afford any higher rent. So they cannot put higher than last year’s rent.
Also the tenants, especially students are likely to stay about 8 to 9 months. Before it was a full 12 months.
So RRA has not been any good for landlords.
I am not letting to students anymore.

Reply to the comment left by Tiger at 28/05/2026 – 15:14
The Renters Rights Act says that you can’t let to a tenant for less than 12 months doesn’t it? I have let to tenants for 5-6 months in the past because that’s what they needed, but I can’t do it now.

I was speaking to a couple of landlords this morning, one of whom was saying it’s not worth the risk of them renting their property out now. I think for some landlords the current climate will mean that it is better for them to do AirBnB.