Landlords rush to protect income over Renters’ Rights Act fears
Landlords are racing to protect their income in response to the government’s divisive Renters’ Rights Act, which banned no-fault evictions and fixed tenancies.
Private landlords have been rushing to secure income protection and rent guarantees since the reforms became law at the start of May, according to an AIM-listed firm.
Rent Guarantor said it saw a 115 per cent uplift in demand for its services in May, as revenue surged to £700k.
Property experts have warned that the Renters’ Rights Act could leave landlords with no way to rid themselves of so-called problem tenants and prompt an exodus from the private rental sector.
Rent Guarantor said the reforms have caused a “structural shift” in demand for rent and property damage guarantees, as landlords rush to secure their income amid the uncertainty of the new laws.
‘Structural changes’ to rental sector
The firm’s overall revenue jumped by 155 per cent to £2m in the first five months of the year, it said.
“This was driven by a material uplift in new guarantee issuances and higher adoption of the company’s solutions across core customer segments within the private rental sector,” the business said.
Rent Guarantor’s revenue boost was rewarded by investors on Monday’s market open, which saw its shares jump by 13 per cent to 32p.
The firm said it expects this inflated demand for income protection to persist, setting it on track for a full-year profit “materially above market expectations”.
Chief executive Paul Foy said: “The company’s performance in May 2026 marks a clear shift in demand for our professional guarantor service.
“The structural changes to the sector resulting from the Renters’ Rights Act are driving sustained growth across our core customer segments and reinforcing the relevance of our solution.”
AI investment drives efficiency
Rent Guarantor said it is piling investment into AI to allow it to fast-track its rent guarantee services without the need to hire more workers.
This investment will allow the firm to grow its capacity from 20,000 to 100,000 contracts per year.
The Renters’ Rights Act came into force on May 1 amid warnings from property lawyers that the reforms would make it harder and more expensive for landlords to regain possession of their property.
Mustafa Sidki, a contentious construction litigation partner at Thackray Williams, said: “This reduced flexibility is causing many landlords to rethink their investment strategies, especially as other factors mean they are facing reduced – and even negative cashflow – while also facing increased admin and responsibilities.”
The National Residential Landlords Association dubbed the new laws the biggest shakeup to the private rental market in nearly 40 years.
Other reforms included in the Act – such as new decent homes standards and a rental ombudsman – are in the pipeline but are yet to be implemented.