Reform prompting a 33% to sell and 29% to reconsider expansion
More than half of landlords (53%) believe the Renters’ Rights Act has negatively affected their buy-to-let business since the main changes came into force on May 1, with 22% saying it had been ‘very negative’ and 31% saying it had been ‘somewhat negative’.
The figures, from Landbay’s Q3 survey of more than 2,000 landlords, also found a negative impact on investment decisions. A third (33%) had decided to sell or were considering selling, while 29% had reduced their plans to expand portfolios.
More than a third (36%) had increased rents or changed their tenant referencing or affordability requirements (34%), and 16% had increased their use of letting agents and/or other professional support.
13% were setting aside more money to cover costs, although 28% reported making no significant changes to their businesses.
Abolition of Section 21 has had biggest impact
Landlords said the abolition of Section 21 ‘no fault’ evictions had the most impact on their business, cited by a third (32%) of those surveyed. Changes to possession grounds were highlighted by 14%, and 15% highlighted the replacement of fixed-term tenancies with periodic tenancies.
The survey also found confusion around the national landlord registration requirements, the regional rollout of which begins next month (December). While more than 90% were aware that a registration service was being introduced, 17% said they did not fully understand the requirements and a further 17% knew it was being introduced but did not know the details.
Nearly two-thirds (65%) expected the new registration system to increase costs, while 44% anticipated spending more time managing their properties.
Their registration requirements are also causing landlords to reconsider portfolios. More than a third (38%) believed the requirements could lead them to increase rents where possible, 33% said they could make them less likely to purchase additional properties and 26% said they could make them more likely to sell. Only 12% expected the registration requirements to have little or no impact on their businesses.
While 59% described themselves as either ‘very’ or ‘quite prepared’ for the introduction of landlord registration, a quarter (24%) said they were either not very prepared or not prepared at all, while a further 17% said they did not yet know enough about the requirements to assess their level of preparation.
Rob Stanton, sales and distribution director at Landbay, said: “One year on from the Renters’ Rights Act becoming law, we are beginning to understand how landlords have responded to the changes, with more than half reporting a negative impact on their businesses. Perhaps more telling is the number who have already increased rents, changed tenant requirements or reconsidered their plans to buy and sell properties.
“These are not simply concerns about what might happen in the future. Landlords are already making practical decisions based on the requirements they now face.”
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