The Renters' Rights Act came into force on 1 May, but brokers warn the full impact on buy-to-let lending is still weeks away
The Renters' Rights Act has been law for almost two months, yet the buy-to-let mortgage market has absorbed its arrival with barely a tremor. Brokers say the real disruption is still coming, and lenders may need to start asking harder questions.
The Act abolished assured shorthold tenancies and ended no-fault Section 21 evictions across England's private rented sector (PRS), which accounts for 4.7 million households – 19% of all households in England – according to the English Housing Survey 2024–25, published by the Ministry of Housing, Communities and Local Government.
Jeni Browne (pictured top right), sales and marketing director at Mortgage Finance Brokers in Kent, told Mortgage Introducer the opening weeks had been largely uneventful, but that a more significant test is on the horizon.
"Honestly, no," she said, when asked whether the market had shifted noticeably since the Act came in. "For example, the tenancy agreement and it all just kind of automatically transitioned, so nothing really happened there. I think we'll hear a lot more fallout from that once the court process kicks in – probably end of July, early August. That's when that kind of starts to really impact people."
Landlords prepared – but the clock is ticking
Browne stressed the extended legislative timeline had given landlords room to act. She pointed to a surge in auction sales of rental properties in the run-up to the deadline, with others serving Section 21 notices on tenants in the final months to reclaim possession before the change took effect.
Josh Quinn (pictured top left), operations manager at Response Mortgage Services in Leeds, told Mortgage Introducer landlord behaviour had already shifted well before the Act came into force.
"I think all the different bits that have affected landlords – such as the taxes, the higher rates – they have been drip-fed through, and that's sort of been a bit more resilient in what they're doing," he said.
Quinn noted a structural shift among his client base, with portfolio-minded investors now clearly dominant. "The days have been and gone of having a couple of properties in the background just to boost retirement. They're either going to hold a fair few or none. It's just not worth having a couple of properties in your personal name."
The English Private Landlord Survey, analysed by Propertymark in January, found 45% of landlords in England own just a single rental property, yet this group is increasingly finding the economics difficult to justify. The pivot towards limited company structures has accelerated, with landlords attracted by the ability to retain rental income within a corporate wrapper. Quinn also reported growing interest in new build, driven by buyers wanting stock that already meets energy performance certificate (EPC) requirements and avoids void periods.
What should brokers be doing now?
For brokers still focused on the mortgage transaction, both professionals warned the job description is quietly widening.
"Brokers do need to inform themselves about the Act and what's changed for people, because to not know and then be dealing with landlords doesn't look great," Browne said. "But in terms of requirements on brokers, nothing's really changed at the moment."
That may not hold for long. Browne flagged the incoming PRS landlord database – due to begin rolling out from later this year – as a potential inflection point. Landlords will be required to register before letting a property, and Browne said lenders may eventually use it as a due diligence tool.
"If you're a lender and you've got access to data as part of your underwriting, it would almost be unusual to not have a look at that," she said. "If your borrower is not represented in a favourable light on the database because they don't have all the right certificates or whatever it is, as a lender, you may be concerned about that.
"From a broker perspective, the best thing they can be doing is informing themselves about the database and making sure that clients are aware this is coming. The next stage would be, are lenders referencing this, and how is it going to impact my sales process?"
For brokers covering the wider UK mortgage market, Quinn noted only around three lenders currently offer free legal assistance on limited company remortgages – a gap he regards as a meaningful barrier to competition.
"A rate of 0.2% cheaper, it's still not worth moving because they're going to have to pay £1,500 to get it just for the legal side of stuff," he said.
Section 21 and the arrears question
Browne raised a scenario lenders have not yet been required to confront. What happens when landlords wait significantly longer to remove non-paying tenants through the new court-based possession process?
"If lenders are experiencing more arrears on their landlords and we've got non-paying tenants that they have to wait 12 months to get out of the property, the property is not income-generating for a longer period of time, which could put them at risk," she said.
"No lender's come to us recently and said, 'Does this client have rent guarantee insurance?'" she added. "But I would not be surprised if the court process doesn't get sorted out."
Quinn said buy-to-let accounts for around 25–30% of business at Response Mortgage Services, unchanged across the past several years. Experienced landlords are continuing to transact, while smaller investors are taking a wait-and-see approach. Brokers looking to stay relevant – in line with the latest developments in buy-to-let mortgage lending – would need to broaden their knowledge beyond the mortgage product itself.
"Landlords need to start looking to structure things," Quinn said. "A lot of it's forward planning for clients."
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