The abolition of Section 21 ‘no-fault’ evictions, the introduction of open-ended tenancies, and new restrictions on rent increases and advance payments are likely to result in higher rents and greater selectivity among landlords, according to research by Pegasus Insight

The recently enacted Renters’ Rights Act is prompting landlords to reconsider their approach to lettings, with many anticipating higher costs and regulatory demands.

Research by Pegasus Insight indicates that the abolition of Section 21 ‘no-fault’ evictions, the introduction of open-ended tenancies, and new restrictions on rent increases and advance payments are likely to result in higher rents and greater selectivity among landlords.

According to the Landlord Trends Q3 2025 report, a significant majority of landlords expect the new legislation to influence their letting practices. Eight in 10 landlords (81%) plan to be more selective when choosing tenants, while 71% intend to raise rents to offset additional costs. Furthermore, 73% believe the Act will negatively affect their own lettings activity, and 81% foresee a broader negative impact on the private rented sector.

The Renters’ Rights Act marks one of the most significant shifts in the private rented sector in decades, and many landlords are preparing cautiously, said Mark Long, founder and managing director of Pegasus Insight.

He said: Faced with stricter limits on rent reviews and growing uncertainty around evictions, they’re acting pre-emptively to protect income and manage risk. These are rational business responses, but they risk compounding the affordability pressures tenants are already facing.

The research also highlights a divergence between landlord and tenant perspectives. While landlords expect increased costs and reduced flexibility, tenants often view the reforms as beneficial.

Long noted that nearly half of renters believe the Act will improve their situation, mainly due to enhanced protections and limits on rent rises. However, the data shows that four in five landlords plan to be more selective, and two-thirds are likely to increase rents in response to the changes.

This mismatch between perception and reality underlines how complex PRS reform can be: policies designed to protect tenants could, unintentionally, make it harder for them to find and afford a home, Long said.