A new lettings landscape: opportunities for landlords under the Renters’ Rights Act

The Renters’ Rights Act, in force as of 1st May this year, introduces significant reforms to the UK’s private rental sector, and landlords affected by the legislative changes will have had to digest and action the new rules. For these landlords, the majority small-scale property owners, understanding current market conditions, realising the value added by professional management and providing tenants’ key demands, is more critical than ever to future success.

Knight Frank agents give a snapshot of how to make the most of the opportunities ahead.

Corporate lettings

“I think one of the effects of the Renter’s Rights Act (RRA) will be to tighten available stock and make landlords more cautious about potential tenants and that’s one place where we add value,” says John Humphris, Partner in Knight Frank’s Corporate & Relocation Services.

“There’s a huge appetite from landlords for professional tenants and that’s our team’s area of focus. While corporate lettings are excluded from the new Act, many companies relocating staff give employees an allowance which means the lease is taken out in an individual’s name and not classified as a corporate let. However, we can reassure landlords that the tenants we put forward are in the UK with a reputable law firm or bank for example, on a set two to three year secondment.”

London lettings

London continues to be a top city for global mobility, says Humphris, and despite tighter immigration rules and housing pressure, demand remains resilient for senior and specialist roles in sectors including finance, technology and professional services.

“Marylebone, Islington, Notting Hill and Kensington are among our clients’ most requested areas, locations with excellent facilities on the doorstep, but overall, the preferred locations and property styles are widely varied with the unifying factor of all being best-in-class,” says Humphris. “That could be a one-bedroom apartment in a new development in East London, a pied-a-terre in West London or an entire Notting Hill townhouse.”

Across the prime London market in general, renters are willing to pay a premium for high-quality, well-maintained and energy-efficient homes that offer certainty, convenience and ease, says Gary Hall, Knight Frank’s Head of Lettings. “Properties that are turnkey, well-presented and centrally located perform best, particularly where they include outside space and have clearly seen investment by the landlord. Responsive, professional property management is critical, giving tenants confidence around security, quick issue resolution and the ability to stay long-term without disruption.”

Hall advises landlords to consider proximity to good transport links with easy access to train stations and to schools. Offering flexible short and long-let options and a pet-friendly approach should also drive longer tenant retention.

Good landlords can benefit from tightening supply by standing out on quality, professionalism and tenant experience. As poorer-quality and less-engaged landlords exit the market, those treating renting as a long-term service rather than a transaction are well-placed to gain market share, achieve stronger returns and build trusted tenant relationships. By investing in well-maintained, energy-efficient and ready-to-move-into homes, landlords can attract higher-calibre long-term tenants, justify stronger rents, reduce voids and disputes and build more stable income streams.

Rural lettings

Rural tenants are often especially eager to secure the comfort of a fixed term rental but the RRA has abolished Assured Shorthold Tenancies, putting all lets on a rolling contract basis.

“Tenants like the security given by rural estates who wish to retain their residential property portfolio long term,” says Jess Waddington, Partner in Rural Consultancy. “The number of compliance changes over the past 10 years or so coupled with upcoming changes to Minimum Energy Efficiency Standards give landlords the chance to improve their portfolio offering and with good renovations, these properties can represent good options for tenants. As the market of rental properties shrinks, it’s an opportunity for rural estates to have their pick of quality, long-term tenants.”

Build to rent

“Tenants are prepared to pay premiums for the service and range of amenity options that Build to Rent schemes can offer,” says Hall. “They see landlords using professional managing agents as reassurance on more traditional stock.”