Landlords tighten tenant checks as costs rise

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Property118

Landlords tighten tenant checks as costs rise

Landlords are raising rents and becoming more selective about tenants as operating and regulatory costs climb, according to new research.

Some landlords are also putting property improvement work on hold, even while preparing to buy more properties.

Handelsbanken surveyed 200 UK property investors, landlords and property management professionals for its fifth annual Property Investor Report.

It found that 63% had increased rents because of higher overall costs.

Tenant rights bring higher costs

Handelsbanken’s chief economist, James Sproule, said: “The private rented sector is not simply becoming more expensive for landlords to operate; it is becoming more selective.

“Higher costs and greater tenant rights are feeding into rent decisions, but they are also changing how professional investors think about tenant risk, affordability and long-term portfolio planning.

“For renters, that means the challenge may not only be what they pay each month, but how competitive the market feels when trying to secure a suitable home or addition to their portfolio.”

He added: “Higher standards and stronger tenant protections are intended to improve the rental sector over the long term.

“But they also come with real costs, and our research shows professional investors are already adapting their behaviour in response.”

Most tighten tenant selection

In response to the Renters’ Rights Act, 59% said they were tightening their selection criteria, while 44% were considering increasing rents earlier than planned.

Maintenance and repairs were the most frequently reported cost increase over the past 12 months, cited by 45% of respondents.

Insurance costs had risen for 41%, while 40% pointed to spending on energy efficiency improvements.

One in five investors said they had sold properties because of rising costs, while 19% had taken homes out of the private rented sector.

Another 46% had delayed upgrades or improvement work.

Cost of the RRA

The median cost reported for complying with the Renters’ Rights Act was £5,000, although the mean stood at £31,411.

Respondents expected a median annual compliance and improvement bill of £20,000 during the next 12 months.

Handelsbanken said the figure related to spending across professional portfolios and should not be treated as the likely increase for an individual tenant.

Despite the sales and withdrawals reported by some respondents, 84% said they intended to increase the size of their holdings during the next 12 months.

That compares with 54% in Handelsbanken’s 2025 survey.

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Landlords tighten tenant checks as costs rise

admin    Uncategorized     agents

Property118

Landlords tighten tenant checks as costs rise

Landlords are raising rents and becoming more selective about tenants as operating and regulatory costs climb, according to new research.

Some landlords are also putting property improvement work on hold, even while preparing to buy more properties.

Handelsbanken surveyed 200 UK property investors, landlords and property management professionals for its fifth annual Property Investor Report.

It found that 63% had increased rents because of higher overall costs.

Tenant rights bring higher costs

Handelsbanken’s chief economist, James Sproule, said: “The private rented sector is not simply becoming more expensive for landlords to operate; it is becoming more selective.

“Higher costs and greater tenant rights are feeding into rent decisions, but they are also changing how professional investors think about tenant risk, affordability and long-term portfolio planning.

“For renters, that means the challenge may not only be what they pay each month, but how competitive the market feels when trying to secure a suitable home or addition to their portfolio.”

He added: “Higher standards and stronger tenant protections are intended to improve the rental sector over the long term.

“But they also come with real costs, and our research shows professional investors are already adapting their behaviour in response.”

Most tighten tenant selection

In response to the Renters’ Rights Act, 59% said they were tightening their selection criteria, while 44% were considering increasing rents earlier than planned.

Maintenance and repairs were the most frequently reported cost increase over the past 12 months, cited by 45% of respondents.

Insurance costs had risen for 41%, while 40% pointed to spending on energy efficiency improvements.

One in five investors said they had sold properties because of rising costs, while 19% had taken homes out of the private rented sector.

Another 46% had delayed upgrades or improvement work.

Cost of the RRA

The median cost reported for complying with the Renters’ Rights Act was £5,000, although the mean stood at £31,411.

Respondents expected a median annual compliance and improvement bill of £20,000 during the next 12 months.

Handelsbanken said the figure related to spending across professional portfolios and should not be treated as the likely increase for an individual tenant.

Despite the sales and withdrawals reported by some respondents, 84% said they intended to increase the size of their holdings during the next 12 months.

That compares with 54% in Handelsbanken’s 2025 survey.

The post Landlords tighten tenant checks as costs rise appeared first on Property118.

View Full Article: Landlords tighten tenant checks as costs rise

Nine in 10 landlords no longer believe property will beat inflation

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Property118

Nine in 10 landlords no longer believe property will beat inflation

For decades, the case for buy to let rested on one quiet assumption: that property values would rise over time. New survey data suggests landlords have stopped believing it.

When the Property118 Landlord Sentiment Survey asked landlords in Q2 what they expected to happen to property values over the next three years, the answers were sobering.

Almost half, 48.7%, expect values to stagnate or fall behind inflation. A further 43.3% expect them merely to keep pace with inflation. Only 8% anticipate real-terms growth.

Put another way, more than nine in 10 landlords do not expect property to outpace inflation over the next three years.

Why this figure matters more than it looks

Rental yield has always been only half of the buy to let equation. The other half, the part that made the sums work despite tax and regulation, was capital appreciation. Landlords accepted thinner margins on rent because the asset itself was expected to grow.

Take away the expectation of growth, and the entire investment case has to be re-examined. If a property is not going to rise in real terms, then every cost levied against it, higher borrowing, Section 24, tighter regulation, EPC upgrades, has to be justified out of rental income alone. For many landlords, that arithmetic no longer works.

The confidence story, in context

This was a new question for Q2, so there is no direct Q1 comparison. But it does not sit in isolation. It arrived in the same survey that showed the intention to sell or exit strengthening, and it helps explain why.

A landlord who expects strong capital growth can ride out a difficult few years. A landlord who expects none has far less reason to absorb rising costs and mounting regulation. The collapse in value optimism and the hardening exit intention are two sides of the same coin.

A rational response, not a panic

It would be easy to read these numbers as gloom. They are better understood as calculation. The typical respondent owns around five properties and has been a landlord for years. These are not speculators; they are experienced investors weighing returns against risk.

When experienced investors conclude, in overwhelming numbers, that an asset class will not beat inflation, that is not a mood. It is a verdict. And it is one policymakers should note, because a sector that no longer expects to be rewarded for holding property is a sector that will, in time, hold less of it.

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