The forthcoming Renters’ Rights Act could have unintended consequences for those it is partly designed to protect, with concerns mounting that more vulnerable tenants may find it harder to secure a home.
That is the view of Louisa Sedgwick, head of mortgages at Paragon, who warned that landlords are likely to adopt a more risk-averse approach to tenant selection once the new rules take effect. Speaking on the latest episode of Housing Unpacked, hosted by Knight Frank, she suggested that increased compliance requirements and reduced flexibility could prompt landlords to scrutinise applicants more closely before offering tenancies.
Sedgwick, who has been actively involved in lobbying government during the development of the legislation, said the shift in behaviour could disproportionately impact renters perceived as higher risk, including those with lower incomes or less conventional employment. Her comments reflect broader concerns within the sector that, while the reforms aim to improve security and standards, they may also reshape landlord decision-making in ways that tighten access at the margins.
Paragon, a FTSE 250-listed lender with a £14bn mortgage loan book and around 47,000 landlord customers, has been closely engaged in policy discussions throughout the legislative process—giving its leadership a front-row view of how sentiment among landlords is evolving ahead of implementation.
“I think what will happen without a shadow of a doubt, and you are already seeing this, is that the due diligence that landlords will do on any new tenant will be significantly higher than it has been in the past,” she said.
“A tenant can now no longer pay rent in advance, and that might have been a way to secure a property if they had a previous poor credit history or they weren’t working or relying on universal credit. We’ll see more vulnerable tenants not being able to secure properties as a result of the Renters’ Rights Act.”
The new Act is the latest in a series of obstacles that have faced landlords in recent years, which have included higher rates of stamp duty and the ending of tax breaks.
As a result, more landlords have sold up, which has pushed supply lower and rents higher in many areas including London, where renting is most prevalent in the UK.
“There is absolutely a move towards hobby landlords leaving the sector,” said Sedgwick. “It just becomes harder, and I think this is kind of the point where landlords say, unless I’m going to do this either as a full-time role or certainly concentrate and focus time and effort on making sure that I can make this a viable business, then I’m actually going to move out of the sector.”
