Over half (53%) of landlords believe the Renters’ Rights Act (RRA) has negatively impacted their buy-to-let (BTL) business, Landbay has revealed.

The BTL lender’s Q3 survey of over 2,000 landlords found that 31% described the impact of the RRA as “somewhat negative” since its main measures came into force in May, while 22% said it has been very negative.

As a result of the changes, 36% of BTL landlords have increased rents, while 34% have changed their tenant referencing or affordability requirements and 16% have increased their use of letting agents and/or other professional support.

Landbay found that when asked what changes they had made as a result of the RRA, 33% said they had decided to sell or were considering selling properties, while 29% had reduced plans to purchase additional rental properties. The company said this suggests the legislation is already influencing investment decisions among a number of respondents.

Other changes include 13% setting aside more money to cover costs, although 28% reported making no significant changes to their businesses.

Sales and distribution director at Landbay, Rob Stanton, stated: "One year on from the RRA becoming law, we are beginning to understand how landlords have responded to the changes, with more than half reporting a negative impact on their businesses. Perhaps more telling is the number who have already increased rents, changed tenant requirements or reconsidered their plans to buy and sell properties.

"These are not simply concerns about what might happen in the future. Landlords are already making practical decisions based on the requirements they now face, although the impact will inevitably differ depending on individual circumstances and portfolio structures."

The survey also examined landlords’ knowledge and views on the forthcoming national landlord registration requirements, with more than 90% saying they were aware that a registration service was being introduced.

However, awareness did not necessarily mean landlords fully understood their obligations, with 17% saying they were aware of the register but did not understand the requirements, while the same proportion knew a register was being introduced but did not know the details.

Stanton concluded: "The findings around landlord registration are also interesting, particularly given the high level of awareness but the more mixed picture when it comes to understanding and preparation. Many landlords expect the new requirements to increase both the costs and time involved in managing their properties, adding to the pressures they are already facing.

"This week's Budget announcement of a further increase in income tax on property income for landlords holding properties in their personal names across England, Wales and Northern Ireland adds another financial consideration, particularly for those already reviewing the viability of their existing portfolios and future investment plans.

"Landlords need clear guidance about their responsibilities and sufficient time to prepare for the changes still to come."

---