The Renters’ Rights Act: What the data tells us – and what comes next

The private rented sector is at an inflection point. With the Renters’ Rights Act set to reshape the landscape for landlords and tenants alike, understanding how the market is responding has never been more important, writes Seb Verity, Allsop.

When Allsop surveyed over 1,000 landlords earlier this year, ahead of the Act’s implementation, the results painted a nuanced picture – one that reflected both the scale of change underway and the opportunity to shape how that change lands.

The headline finding was significant: 41.7% of landlords said they were unlikely or very unlikely to continue as a landlord following the abolition of Section 21. Among single-property landlords, that figure rose to 51.8%. These are not numbers to dismiss – but they are also not the whole story.

A sector consolidating

England’s private rental sector isn’t simply shrinking – it’s consolidating. Smaller, often accidental landlords are exiting while larger, more institutional operators are selectively holding or growing. Among landlords with 26 or more properties, 44% planned to maintain or increase their investment levels over the next two to three years. Among single-property landlords, that figure was just 25%.

This consolidation trend was already underway before the Act. What the legislation does is accelerate it – and that creates both challenges and opportunities. The question for the sector is how to manage that transition in a way that protects tenants and maintains supply.

The cumulative burden

It would be a mistake to view the Renters’ Rights Act in isolation. For many smaller landlords, it represents the latest in a series of significant changes – layered on top of mortgage rate rises, tax reform and mounting EPC obligations. That cumulative weight is testing the resolve of a large cohort of landlords, many of whom provide well-managed, good quality homes for families and many of whom no longer feel they will be able to continue doing so.

Only 19.3% of respondents felt they already met the new standards – a figure that underlined just how much work lies ahead. Around 27% described themselves as either unprepared or considering exit rather than compliance.

On costs, 70.3% of landlords said they would respond to increased compliance burdens by raising rents. That is a finding that policymakers, lenders and the wider industry should take seriously – not as a reason to resist reform, but as a prompt to think carefully about how compliance support, financing and transitional guidance are structured. If the costs of improvement fall entirely on tenants, the Act’s core purpose is undermined.

The supply question

Nearly a third of respondents planned to divest entirely, with a further 18% planning to reduce their portfolios. At the same time, only 7.4% planned to increase investment. The landlords most likely to exit are disproportionately small, individual operators – often long-term owners who have concluded the risk-reward balance no longer works for them. Where they leave and are not replaced, supply tightens – and at a time when simply too few homes are being built to meet housing need, that matters.

The direction of travel is right – the detail is what matters now

The Renters’ Rights Act looks likely to succeed in its ambitions to professionalise the private rented sector and drive up standards, which is certainly to be welcomed. Greater security of tenure and clearer redress mechanisms are a good thing. What comes through in nearly 400 open-ended survey comments is not opposition to reform in principle, but anxiety about implementation – about whether the courts will be resourced to handle the new system, whether compliance support will be available and whether the transition will be managed fairly.

Ultimately, the Act represents the latest transformation of England’s housing stock. Whether that structural shift serves tenants well remains an open question. Much of what it seeks to do is welcome – but in the absence of a more effective strategy to increase housing supply and affordability running alongside it, there is a real risk that it compounds the very challenges it is trying to solve.

The path forward

Auctions are proving an increasingly attractive route for those seeking a quick, reliable, and transparent exit – and as the UK’s leading property auctioneers, Allsop is well placed to help. For those considering a more strategic approach – whether that is selling an unbroken or part-broken block, a portfolio of flats and houses, HMOs or mixed-use properties – Allsop’s Residential Investment team offers national coverage, with deep expertise across all tenancy types, from ASTs and Assured and Regulated Tenancies through to Leases and Ground Rents.

We act on behalf of property companies, high-net worth individuals, receivers and administrators and our advice is backed by an extensive database of around 100,000 active investors – giving clients unrivalled reach at the point of sale. For those who want to keep their options open, we can also offer a combination of private treaty disposal with an auction backstop: a best-of-both-worlds approach that maximises flexibility without sacrificing certainty.

The private rental sector is changing. Whether you are looking to adapt your portfolio to the new landscape or considering an exit, Allsop has the expertise to help you make the right decision for your circumstances.

Data is based on Allsop’s survey of 1,000+ landlords conducted ahead of the Renters’ Rights Act’s implementation.

• Seb Verity is head of research at Allsop