Rent reforms could create rise of “unlettable tenants”, landlords warned

Legal experts say Renters’ Rights Act may unintentionally tighten access to private rentals as landlords raise risk thresholds

The forthcoming Renters’ Rights Act could reshape the UK rental market in unexpected ways, with industry experts warning it may lead to a growing pool of “unlettable tenants” as landlords respond by tightening affordability and risk criteria.

According to property advisory firm LegalforLandlords, reforms designed to improve tenant protections could instead prompt landlords in the private rented sector to become significantly more cautious when selecting applicants.

The legislation aims to increase stability for renters by strengthening protections and limiting landlords’ ability to regain possession of properties. However, with the removal of certain eviction powers and ongoing delays in the court system, landlords are expected to reassess the financial risk of renting altogether.

Experts say the key shift is not legal exclusion, but practical filtering. As risk increases, landlords are likely to raise affordability thresholds and prioritise applicants with stronger financial profiles, effectively narrowing access to housing.

Groups most affected may include lower-income renters, applicants with irregular earnings, students without guarantors, and those with weaker credit histories. While not formally excluded, these tenants may find it increasingly difficult to pass referencing checks.

Stricter affordability benchmarks are expected to become more common, with many landlords moving from traditional income requirements of around 2.5 times rent to three times or higher — a change that could significantly reduce eligibility in high-cost areas such as London.

Industry concerns also centre on rising reliance on guarantors, which may become essential rather than optional for many applicants. However, inconsistent access to suitable guarantors could lead to more failed applications at later stages of the process.

Additional friction is expected from tighter referencing procedures, evolving insurance requirements, and increased compliance obligations around energy efficiency and safety standards. Together, these factors are likely to make letting decisions slower and more selective.

LegalforLandlords argues the result will not be a fall in demand, but a widening gap between demand and eligibility — a situation where properties are sought after but remain vacant due to applicants not meeting enhanced criteria.

Sim Sekhon, Group CEO of LegalforLandlords, said the reforms represent a necessary attempt to rebalance the market but warned of unintended consequences. He said landlords will naturally seek to mitigate increased risk, most commonly through stricter affordability checks, which could exclude otherwise reliable tenants.

He added that the challenge will be maintaining balance between protecting landlords and ensuring broad access to housing, highlighting the need for better referencing systems and insurance-backed solutions to keep the market functioning effectively.

As the reforms take shape, experts suggest the private rented sector may become increasingly defined not just by demand, but by who is deemed financially “acceptable” to let to — reshaping access to housing in the process.

Rent reforms could create rise of “unlettable tenants”, landlords warned – ATV Today