A study of some 2,000 landlords by the mortgage lender Landbay suggests some are adapting how they operate because of the Renters Rights Act.
The survey shows that 36% have increased rents, 34% have changed tenant referencing or affordability requirements, and 16% increased use of letting agents and/or other professional support.
Landlords changing rents and investment plans
When asked what changes they had made as a result of the Act, almost a third (33%) said they had decided to sell or were considering selling properties, while 29% had reduced plans to purchase additional rental properties, suggesting the legislation is already influencing investment decisions among a number of respondents.
Other changes included 13% setting aside more money to cover costs, although 28% reported making no significant changes to their businesses, highlighting the different experiences of landlords as they adjust to the new requirements.
The survey also asked landlords which individual elements of the Act had, or were expected to have, the greatest impact on their businesses, with the abolition of Section 21 evictions cited by 32%.
Changes to possession grounds were highlighted by 14%, while 15% pointed to the introduction of periodic tenancies and the end of fixed-term tenancies, demonstrating the range of practical concerns landlords have been considering as the legislation takes effect.
Landlord registration expected to increase costs
The survey also examined landlords’ knowledge and views on the forthcoming national landlord registration requirements, with more than 90% saying they were aware that a registration service was being introduced.
However, awareness did not necessarily mean landlords fully understood their obligations, with 17% saying they were aware of the register but did not fully understand the requirements, while a further 17% knew a register was being introduced but did not know the details.
When asked about the likely impact on their businesses, almost two-thirds (65%) expected the new registration system to increase costs, while 44% anticipated spending more time managing their properties.
More than a third (38%) believed the requirements could lead them to increase rents where possible, while 33% said they could make them less likely to purchase additional properties and 26% believed they could make them more likely to sell.
Only 12% expected the registration requirements to have little or no impact on their businesses, suggesting landlords anticipate further changes to their costs and the way they manage their rental properties.
Preparation remains mixed ahead of registration
The survey also highlighted differences in how prepared landlords feel for the new requirements, with 59% describing themselves as either ‘very’ or ‘quite prepared’ for the introduction of landlord registration.
However, 24% said they were either not very prepared or not prepared at all, while a further 17% said they did not yet know enough about the requirements to assess their level of preparation.
A Landbay spokesperson says: “One year on from the Renters’ Rights Act becoming law, we are beginning to understand how landlords have responded to the changes, with more than half reporting a negative impact on their businesses.
“Perhaps more telling is the number who have already increased rents, changed tenant requirements or reconsidered their plans to buy and sell properties.
“These are not simply concerns about what might happen in the future. Landlords are already making practical decisions based on the requirements they now face, although the impact will inevitably differ depending on individual circumstances and portfolio structures.”
This article is taken from Landlord Today