Renters’ Rights Act sparks landlord exodus as rents rise

Tenants are facing the fallout from the Renters’ Rights Act, with landlords leaving the market and rents rising, according to new research.

SpareRoom claims, since the Renters’ Rights Act came into force, room rents have reached record highs, while supply has dwindled.

Data from SpareRoom shows that 78% of landlords in England have no confidence in the rental market following the introduction of the Renters’ Rights Act.

Landlords are leaving the market

According to the data, 27% of landlords are leaving the rental market, rising to 44% among single-property landlords.

More than a third (36%) say they are now reducing the size of their portfolios, rising to 53% among larger landlords. Fewer than 4% say they are expanding their portfolios.

Matt Hutchinson, director of flatshare site SpareRoom, said tenants are paying the price as landlords leave the market.

He said: “It’s still early days for a change that’s supposed to offer a generational shift in behaviour. But for all the good it has done tenants so far, and the end of no-fault evictions and bidding wars has been positive, the Renters’ Rights Act has also battered supply and forced up asking rents.

“It’s unlikely this will be resolved any time soon because landlords are still reacting to the changed landscape. Some have told us that while they’re not selling up right now, they don’t plan to re-let when their current tenants leave.

“While landlords have the option to walk away and invest their money elsewhere, tenants don’t. They’re now facing the fallout of a private rented sector that’s deterring those who provide homes.”

Demand for guarantors surges

The news comes as demand for rent guarantors has surged by 50% since the Renters’ Rights Act came into effect.

Under the Renters’ Rights Act, landlords and agents can no longer accept large amounts of rent in advance.

Once a tenancy agreement has been signed, they may require no more than the initial month’s rent before occupation, although a tenant can voluntarily choose to pay rent early once the tenancy has begun.