Landlord confidence up despite regulatory pressures in private rented sector
The recently enacted Renters’ Rights Act is prompting landlords to reconsider their approach to lettings, with many anticipating increased costs and regulatory demands.
Research by Pegasus Insight indicates that the abolition of Section 21 ‘no-fault’ evictions, the introduction of open-ended tenancies, and new restrictions on rent increases and advance payments are likely to result in higher rents and greater selectivity among landlords.
According to the Landlord Trends Q3 2025 report, a significant majority of landlords expect the new legislation to influence their letting practices. Eight in 10 landlords (81%) plan to be more selective when choosing tenants, while 71% intend to raise rents to offset additional costs. Furthermore, 73% believe the Act will negatively affect their own lettings activity, and 81% foresee a broader negative impact on the private rented sector.
“The Renters’ Rights Act marks one of the most significant shifts in the private rented sector in decades, and many landlords are preparing cautiously,” said Mark Long, founder and managing director of Pegasus Insight.
“Faced with stricter limits on rent reviews and growing uncertainty around evictions, they’re acting pre-emptively to protect income and manage risk. These are rational business responses, but they risk compounding the affordability pressures tenants are already facing.”
The research also highlights a divergence between landlord and tenant perspectives. While landlords expect increased costs and reduced flexibility, tenants often view the reforms as beneficial. Long noted that nearly half of renters believe the Act will improve their situation, mainly due to enhanced protections and limits on rent rises. However, the data shows that four in five landlords plan to be more selective, and two-thirds are likely to increase rents in response to the changes.
“This mismatch between perception and reality underlines how complex PRS reform can be: policies designed to protect tenants could, unintentionally, make it harder for them to find and afford a home,” Long said.
Meanwhile, separate research from Landbay reveals a notable shift in landlord sentiment. The proportion of buy-to-let landlords expressing a positive outlook for their businesses has more than doubled since last year’s Autumn Budget, rising from 18% to 36%. The share of landlords with a negative outlook has fallen from 43% to 21%, while 44% remain neutral.
Landbay’s survey, which was conducted prior to reports of potential Treasury plans to introduce National Insurance charges on rental income, found that strong rental demand and yields are key factors underpinning optimism. Some landlords cited the impact of reduced stock on rising rents and the continued viability of property investment, particularly for those operating as limited companies.
“It is very encouraging to see landlord confidence rebounding,” said Rob Stanton, sales and distribution director at Landbay. “The data reflects what we are hearing on the ground with high rental demand and strong yields helping to underpin optimism across the sector.
“On top of that, our survey and lending data tells us that landlords remain committed to the sector – not just staying put, but seizing new investment opportunities available in the market. As the data demonstrates, this isn’t the story for everyone and is likely a shifting picture as we head towards the Autumn Budget.”
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