More than 40% of private residential landlords surveyed in research by property consultancy Allsop have said they are unlikely to continue letting after the Renters’ Rights Act (RRA) comes into force in May.
The act, passed in October after being introduced to Parliament in September 2024, givers renters more rights and includes the abolition of Section 21 ‘no-fault’ evictions.
The first phase of the act will also make it illegal for landlords and letting agents to increase rents more than once a year, ask for more than one month’s rent in advance or pit tenants against each other in bidding wars.
In Allsop’s survey of more 1,000 landlords, 41.7% said they are unlikely or very unlikely to continue as private landlords following the abolition of section 21, while the figure rose to 51.8% for single-property landlords.
Allsop said landlords view Section 21 evictions as vital to maintain control of their property investments. Nearly a third (30.3%) of respondents said they plan to sell all the homes they are letting out, with another 18% planning to reduce the number of homes in their portfolios.
Around 70% of landlords said they would respond to increased compliance costs by increasing their rents, with a further 23.2% claiming they would sell their properties. Just under a fifth (19.3%) said they felt ready to meet new standards.
Last week, research from specialist lender Pepper Money claimed landlords were set to withdraw more than 200,000 properties from PRS this year, with 65,000 being taken off the market due to the RRA.
Seb Verity, head of research at Allsop, said the RRA is “likely to succeed in its ambitions to professionalise the private rented sector and to drive up standards,” but warned that “it may end up only adding to or compounding existing housing challenges”.
Verity added: “Greater security of tenure and clearer redress mechanisms are a good thing. But the cumulative weight of regulatory change – layered on top of mortgage rate rises, tax reform and EPC obligations – is testing the resolve of a large cohort of smaller landlords, many of whom provide well-managed, good quality homes for families, but seem to feel they’ll no longer be able to do so.
“This will increase the cost of renting at a time when simply too few homes are being built to meet our housing needs. The RRA represents the latest transformation of England’s housing stock. Whether that structural shift ultimately serves tenants well remains an open question.”
Please visit:
Our Sponsor