LegalforLandlords has warned the Renters’ Rights Act could see more tenants struggling to secure a home as landlords tighten risk controls.
The provider of tenant referencing, insurance and professional services said that tenants earning less than two and a half to three times the annual rent, those with irregular incomes, students without strong guarantors, people with poor credit, and benefit claimants are most at risk of being rejected.
Despite stricter rules on discrimination, the company said landlords will be more cautious.
Referencing checks are expected to become more detailed and time-consuming, raising the chance of failed applications.
Letting agents are also likely to pre-filter candidates more closely, which means fewer viewings and longer empty periods between tenancies.
LegalforLandlords said that tenants who meet tougher criteria will still get homes quickly, but others will be turned down more often.
Rent guarantee insurance is set to involve stricter checks, while landlords must also keep up with energy performance, safety certificates, and redress schemes.
LegalforLandlords said this will encourage even more caution among landlords.
Sim Sekhon, group CEO at LegalforLandlords, said: “The intention behind the Renters’ Rights Act is clear and, in many respects, necessary.
“It aims to create a fairer, more secure rental market for tenants. However, as with any significant regulatory shift, there are knock-on effects that cannot be ignored.
“What we are seeing is a natural recalibration. As landlords lose certain safeguards, many will look to mitigate risk elsewhere, most commonly through stricter affordability criteria.”
Sekhon added: “The challenge is that this can unintentionally exclude otherwise reliable tenants who may fall just short on paper.
“The solution lies in balance. We need to ensure landlords feel protected, but not at the expense of shutting out large sections of renters.
“That is where more innovative, proportionate approaches to risk, whether through better referencing, insurance-backed products, or greater regulatory clarity, will play a crucial role in keeping the market functioning for everyone.”