Four months after the Renters' Rights Act took effect, 62.5% of letting agents report an increase in the time their teams spend on compliance and administration, according to a survey by The Letting Partnership. Of those, 29.2% describe the increase as significant, with a further 33.3% reporting a moderate rise.
The Letting Partnership surveyed letting agents on how the industry is adapting following the Act's 1 May implementation, covering operational pressures, preparedness levels, landlord sentiment, and 12-month expectations for the private rented sector.
Admin and compliance top the list of impacts
When asked to identify the single biggest operational consequence of the Renters' Rights Act, increased administration ranked first, cited by 45.5% of agents. A further 18.2% pointed specifically to a greater compliance workload, while 22.7% said increased disputes or uncertainty had been the primary impact. Just 9.1% reported little or no effect on their business.
Agents describe their own preparedness in relatively positive terms. Some 79.1% consider themselves completely or mostly prepared to operate under the new framework. However, 20.8% remain only somewhat prepared or less, including 12.5% who say they are not very or not at all prepared.
Landlord sentiment turns negative
The picture is less settled when it comes to landlord clients. Almost two-thirds of agents (62.5%) say the Renters' Rights Act has had a negative impact on landlord sentiment, including 45.8% reporting a somewhat negative effect and 16.7% describing it as very negative. Only 16.7% report a positive impact, while 20.8% have seen no noticeable change.
That uncertainty extends to broader market expectations. Half of agents believe the private rented sector will be in a weaker position 12 months from now, compared with 16.6% who anticipate improvement and 33.3% who expect conditions to remain broadly unchanged.
Reduced rental supply is the most widely anticipated long-term consequence of the reforms, cited by 38.1% of agents. Fewer landlords in the sector follows at 33.3%, with higher rents cited by 14.3%. A further 9.5% identified increased use of managing agents as the most likely long-term outcome.
Agents expect their own role to grow
Despite the additional workload, the majority of agents in the survey believe the increased complexity of operating under the Renters' Rights Act could ultimately strengthen demand for their services. Some 70.8% expect professional letting agents to become more important to landlords, including 25% who anticipate becoming significantly more important and 45.8% who expect a moderate increase in their value.
"The Renters' Rights Act has understandably generated a huge amount of discussion around what it means for landlords and tenants, but four months on from implementation, we're also starting to see the operational impact it is having behind the scenes within letting agencies," said Chris Mason, chief operating officer of The Letting Partnership.
"More administration, greater compliance requirements and increasingly complex processes all require additional time and resources. For agents, the challenge is ensuring that this increased workload doesn't come at the expense of the robust processes and controls needed to run a compliant business.
"Interestingly, that same complexity could ultimately strengthen the case for professional management. Landlords are being asked to navigate an increasingly demanding regulatory environment and, for many, having a professional agent with the right expertise, client accounting systems and compliance processes in place will become more valuable rather than less.
"The agents best placed to benefit will be those that don't simply absorb the additional workload, but ensure their operational and client accounting infrastructure is capable of handling it efficiently and compliantly."
