How the RRA is influencing landlords and how we can support them – Steele

To do this, landlords need help translating policy into processes that stand up under scrutiny, something that mortgage intermediaries can support.

We recently engaged with more than 500 landlord customers and one of the most telling findings is a positive one, highlighting continued commitment to the sector.

Planning for change

Asked to think about their plans in the context of the forthcoming legislative overhaul, 27% of landlords plan to grow their portfolios and 47% expect to make no changes; just 5% were considering leaving the private rented sector (PRS) altogether. These figures are fairly consistent with broader industry tracking surveys.

So, landlords aren’t leaving the sector en masse, despite what you might read, but instead are making tangible changes to remain compliant and profitable.

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Seven in 10 (70%) expect to introduce more in-depth checks for prospective tenants and be more careful about where they advertise properties, almost certainly influenced by changes to tenancies and the possession process.

Four in 10 landlords expect the abolition of ‘no-fault’ evictions to have the greatest impact on their lettings businesses, with 37% also citing the transition from assured shorthold tenancies (ASTs) to periodic. Demonstrating the impact of these changes on landlord confidence, 43% worried about being stuck with problematic tenants.

That is not because most tenancies are contentious – 75% reported smooth relationships over the past year – but because landlords need protection. This is particularly true when the finances needed to operate, and often provide their own income, are at stake; over half – 51% – of landlords have experienced rent arrears or late payment in the last 12 months.

Asked what was missing from the framework, 70% of landlords said they’d like to see stronger protections against arrears and just under two-thirds – 65% – wanted faster court processes to reduce delays. This is particularly important now that evictions will need to be on enhanced Section 8 grounds, evidenced in court.

While believing they can remain profitable under the new rules, 35% of landlords expect the RRA to impact them financially, so they are also planning ahead for the costs of delivering compliance.

More than half (53%) said they will consider increasing rent, with 37% planning to review rents on an annual basis, more frequently than they do currently. A smaller proportion (18%) said they will look to make cost savings across their portfolios, such as reviewing the level or frequency of maintenance and white goods replacement.

Uncertainty remains

Despite high awareness, 74% of landlords remained unsure about some or most aspects of the act and 60% said they will need additional support to adapt effectively.

Many are piecing information together from news coverage (59%), letting agents (52%) and landlord associations (48%). They are asking for straightforward summaries of the rules (62%), legal FAQs on compliance and eviction processes (46%), updates on future regulatory change (44%) and usable templates (41%).

For brokers, this is a timely opportunity to add value by helping landlord clients turn broad intent into a practical operating plan. This doesn’t mean brokers need to become policy experts, but having a working knowledge of the act’s key aspects will mean they can offer simple but valuable support, whether that be reviewing documents, sense-checking practices or accessing finance in situations where it is necessary to fund improvements to remain compliant.