Paragon Bank surveyed 500 landlords and found that 69% are introducing more in-depth checks for new tenants to reduce the risk of making evictions. Meanwhile, 70% also said they will also become more selective about where they advertise their properties.
The plans come as the new Renters’ Rights Act comes into force on 1 May, a month from now. Changes for landlords include a ban on no-fault evictions, with evictions only allowed for a certain list of reasons. However, tenants can give two months’ notice to leave at any time.
Rent increases will be limited to once per year, and landlords can only evict for rent arrears after three months rather than two.
Financial impacts
Over a third of landlords said they expect the Renters’ Rights Act to impact them financially, and over half are considering increasing rent. Some 37% plan to review pricing more frequently and 18% will look to make cost savings across their portfolios, potentially changing the level or frequency of maintenance and white goods replacement.
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Lisa Steele, lending director at Paragon Bank, said landlords were adapting their approach to a “major policy shift”.
She said: “Given the pressures expected on the courts through the change to the eviction process, landlords are understandably planning to make more expansive checks on prospective tenants, as they don’t want the cost and time involved in a lengthy eviction process.
“This creates challenges for those new to the rental market who have not yet built up a tenant reference history, as well as those with infrequent income schedules.
“This was always the challenge for the RRA; while in brings in extra protections, it could exclude some of those tenants at the periphery of the market.”
Some landlords unaware
While the Paragon study shows that many landlords are already making plans for the new laws, a significant minority are still unaware of the implications for their business. A study from Pegasus Insight found that a quarter of landlords were unaware of the implications of the act, and that the majority of those were smaller landlords.
