Editor's note: This brief was summarised by The Property AI Team from a report by PropertyWire. Read the original article for full details.
Landlords Face £5,000 Compliance Costs Under Renters’ Rights Act
A recent survey of around 200 property investors by Handelsbanken has found that landlords have incurred median costs of £5,000 to comply with the Renters’ Rights Act. The survey, which focused mainly on professional landlords and portfolio holders, reports that these costs are higher than previous government estimates for compliance with the legislation.
The survey also reveals that 40% of landlords are now prioritising lower-risk tenants. This shift is attributed to increased compliance costs and new eviction procedures, which have made removing problematic tenants more expensive and time-consuming.
Portfolio Adjustments and Market Impact
Financial pressures are leading to significant changes in landlord behaviour. According to the survey, 20% of respondents have sold properties due to higher costs, while 19% have removed properties from the rental market altogether. These adjustments are occurring alongside broader sector challenges, such as higher borrowing costs, increased maintenance and repair expenses, more expensive insurance premiums, and requirements for energy efficiency upgrades.
Nearly half of the landlords surveyed—46%—said that cost pressures have forced them to delay upgrade or improvement works. This raises concerns about the condition of the existing rental housing stock.
The findings indicate that rental market dynamics are shifting as landlords face mounting operational pressures. Increased selectivity among landlords may present additional challenges for renters seeking accommodation in a constrained market.
Source: PropertyWire