Landlords must have greater confidence to let to formerly homeless tenants if the Renters’ Rights Act is to fulfil its promise of creating a fairer private rented sector, according to a charity.

TDS Charitable Foundation’s research suggests landlords may be more willing to accommodate vulnerable tenants than is often assumed. Its findings reveal that 91% of those who let properties through local authorities – including to homeless households and people receiving benefits – are satisfied with their role, compared with 63% of landlords overall.

However, Dr Jennifer Harris, head of policy, research and social impact, says the abolition of Section 21 and longer notice periods could make some more selective about prospective tenants, particularly those on lower incomes or with a history of homelessness.

She warns that clear communication about landlords’ obligations, together with ongoing monitoring of rental supply, is critical if the reforms are to improve outcomes for tenants without discouraging landlords from remaining in the sector.

Challenge

Harris says a key challenge will be ensuring new rules don’t inadvertently create fresh barriers to housing access. As landlords now can’t demand large amounts of rent in advance, some may simply replace upfront rent requirements with demands for guarantors.

However, she argues that landlords should be encouraged to make greater use of rent guarantee products and support schemes. In its survey, more than a third of landlords said a rent guarantee scheme would be their preferred incentive when considering whether to let to people leaving homelessness.

“The message to landlords is clear: you don’t have to choose between managing risk and being accessible,” she says.

Exodus

Harris adds while there is no evidence of a mass landlord exodus, cumulative tax and regulatory changes, alongside frozen Local Housing Allowance rates, are influencing decisions among landlords operating at the lower-cost end of the market.

A quarter of landlords surveyed felt unable to let to people receiving benefits, with about half citing the widening gap between LHA rates and market rents as a key reason. Harris argues that restoring LHA rates to a level that reflects actual rents is vital to protect the affordable PRS housing supply.

Her comments come as fresh research from Barclays suggests buy-to-let investment is becoming less attractive. Its latest Property Insights Report found that seven in ten homeowners are put off by the cost and complexity of being a landlord, while only 11% were considering purchasing an additional property within the next two years.

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