Landlords are raising rents and becoming more selective about tenants as operating and regulatory costs climb, according to new research.
Some landlords are also putting property improvement work on hold, even while preparing to buy more properties.
Handelsbanken surveyed 200 UK property investors, landlords and property management professionals for its fifth annual Property Investor Report.
It found that 63% had increased rents because of higher overall costs.
Tenant rights bring higher costs
Handelsbanken’s chief economist, James Sproule, said: “The private rented sector is not simply becoming more expensive for landlords to operate; it is becoming more selective.
“Higher costs and greater tenant rights are feeding into rent decisions, but they are also changing how professional investors think about tenant risk, affordability and long-term portfolio planning.
“For renters, that means the challenge may not only be what they pay each month, but how competitive the market feels when trying to secure a suitable home or addition to their portfolio.”
He added: “Higher standards and stronger tenant protections are intended to improve the rental sector over the long term.
“But they also come with real costs, and our research shows professional investors are already adapting their behaviour in response.”
Most tighten tenant selection
In response to the Renters’ Rights Act, 59% said they were tightening their selection criteria, while 44% were considering increasing rents earlier than planned.
Maintenance and repairs were the most frequently reported cost increase over the past 12 months, cited by 45% of respondents.
Insurance costs had risen for 41%, while 40% pointed to spending on energy efficiency improvements.
One in five investors said they had sold properties because of rising costs, while 19% had taken homes out of the private rented sector.
Another 46% had delayed upgrades or improvement work.
Cost of the RRA
The median cost reported for complying with the Renters’ Rights Act was £5,000, although the mean stood at £31,411.
Respondents expected a median annual compliance and improvement bill of £20,000 during the next 12 months.
Handelsbanken said the figure related to spending across professional portfolios and should not be treated as the likely increase for an individual tenant.
Despite the sales and withdrawals reported by some respondents, 84% said they intended to increase the size of their holdings during the next 12 months.
That compares with 54% in Handelsbanken’s 2025 survey.
