A quarter of landlords plan to sell their properties and exit the private rented sector as a result of the Renters’ Rights Act

New research from LegalforLandlords finds a quarter of landlords plan to leave the market as a result of the Renters’ Rights Act, with 60% of those staying set to apply significantly tougher tenant vetting.

A quarter of landlords plan to sell their properties and exit the private rented sector as a result of the Renters’ Rights Act, while 60% of those who remain intend to apply significantly stricter criteria when vetting prospective tenants, according to new research from LegalforLandlords.

The firm surveyed more than 900 UK landlords to understand how the legislation is reshaping tenant screening practices and how landlords are managing what many perceive as an increased level of risk.

The abolition of Section 21 no-fault evictions and the replacement of Assured Shorthold Tenancies with Assured Periodic Tenancies sit at the heart of those concerns, as both changes extend tenants’ ability to remain in a property while reducing landlords’ options for regaining possession without valid grounds.

Some 77% of landlords say they are familiar with the Act’s provisions, and 63% believe it will increase their exposure to risk. The abolition of Section 21 is the single biggest concern for 43% of respondents, while 20% are most worried about the end of Assured Shorthold Tenancies.

In response, 50% of landlords plan to apply more stringent screening to tenant applications, with 25% intending to do so significantly. Greater scrutiny of income and affordability checks is the priority for 22%, while 19% plan to lean more heavily on references from previous landlords.

Credit history checks and employment verification are each being stepped up by 16% of respondents. Over half (53%) say they are now more likely to insist on a rent guarantor.

While 63% say they will continue renting with greater vetting and scrutiny in place, 24% are explicit about their intention to sell up entirely. A further 13% plan to reduce the size of their portfolio.

It’s clear from our research that many landlords are approaching the Renters’ Rights Act with a degree of uncertainty, and that’s entirely understandable given the scale of change being introduced, said Sim Sekhon, group CEO at LegalforLandlords.

He said: For some, particularly those who have relied on more traditional routes to regain possession, this represents a significant shift in how the sector operates.