How the Renters’ Rights Act is Changing the Buy-to-Let Market

Three months on from its introduction, how is the Renters’ Rights Act shaping the rental market? Let’s take a look. 

It was billed as the biggest overhaul of the rental market in decades. 

A once-in-a-generation reset that, depending on whom you spoke to, would either crush rogue landlords like cockroaches or the rental market as we know it. 

As it turns out, neither of these predictions has proved true – so far at least. 

But the Renters’ Rights Act (RRA) is having an impact. 

Many tenants report feeling more secure following the abolition of no-fault evictions. 

And some landlords have sold up. (However, many other landlords have stayed put, and some have even expanded their portfolios.) 

Reports indicate that the RRA is also influencing the behaviour of tenants and landlords in other ways. 

Tenants are shopping around more 

The RRA banned bidding wars and made it illegal for landlords to accept or encourage rent above the advertised price.  

This appears to have made the application process less frenzied, as good tenants no longer worry about being rejected solely on the basis of price. 

As a result, they are taking more time to do their homework and compare properties. 

What this means for landlords 

Responsible landlords who keep their rentals in good condition, understand the local market, and set their rents appropriately have nothing to fear. 

Demand for rental properties is still strong (supply is still at least 20% down on pre-pandemic levels). Hence, competition is healthy for well-kept, reasonably priced rentals. 

However, with tenants placing greater emphasis on research, your marketing needs to be slick and your photography professional-standard to show your property at its very best. 

Rent-setting 

Another outcome of the RRA stems from the rule that landlords can only increase rent once a year, and not within the first 12 months of a tenancy. 

This has made rent setting an even more critical task for landlords. 

Set the rent too low, and you’ll have to wait a year to redress the imbalance. 

Then, of course, there is the possibility that when you come to increase the rent a year later, the tenant challenges the hike if they feel it is unreasonably large. 

What this means for landlords 

As always, it’s best to get the rent right the first time. 

It’s helpful to take an evidence-based approach (if you’re ever challenged, you’ll have data to draw on). 

A reputable letting agent can advise you on the market norms and provide you with comparable rental evidence based on agreed lettings. 

If you’d like help managing your rental in the Renters’ Rights era, get in touch. We can help.