Landlords across England are tightening guarantor requirements and becoming more selective with tenants amid changes in the rental market following recent legislation. The introduction of the Renters’ Rights Act, which banned bidding wars and limited upfront rent demands to one month, has altered landlord risk management practices, leading to stricter criteria for securing tenant guarantors.

Prior to May 1, landlords often requested multiple months’ rent in advance to mitigate risks associated with non-payment or antisocial behavior, which can result in eviction proceedings lasting over a year. With that practice now restricted, landlords are focusing more on tenant financial security through guarantors, though demands for guarantors have become increasingly onerous.

Annabelle, 25, who is seeking a replacement flatmate for her two-bedroom rented flat in east London, illustrates these challenges. Her landlord requires that guarantors earn at least £62,000 annually—2.5 times the £24,800 yearly rent—and be full-time employed UK residents, excluding self-employed individuals and many freelancers or newcomers without established UK credit histories. This excludes many professionals on independent contracts and retirees, complicating the search for eligible guarantors and limiting prospective tenants’ options.

Annabelle highlights that her own father, a long-term self-employed business consultant, previously served as her guarantor without issue, but the landlord has now imposed stricter rules for her flatmate’s replacement. Such heightened requirements are becoming more common beyond London as well. James Ottewell of Alexander Bruce Estates in Derby observes that landlords are increasingly selective, favoring applicants with qualifying guarantors, making it harder for those in financially precarious situations to secure rental properties.

The trend is linked to broader pressures on buy-to-let landlords. Over the past decade, rising taxes and regulatory changes have prompted more landlords to sell properties rather than acquire new ones, with some analysts concerned the Renters’ Rights Act might accelerate this sell-off. Ibrahim, a rental market professional, noted that in London last year, seven out of ten landlords chose to list their properties for sale when tenancies ended. However, difficult market conditions have persuaded many to return to the rental market.

Data from LonRes shows an increase in rental property availability in prime central London, rising 23% year-on-year in the second quarter. Likewise, the Royal Institution of Chartered Surveyors reports that for the first time since 2020, landlord instructions in London have not declined for four consecutive months, in contrast to decreases in other regions except northwest England.

Despite some landlords returning to letting, the overall sell-off continues. UK Finance data indicates that approximately 7,500 buy-to-let mortgages are redeemed monthly, maintaining a steady pace over the past year. Some landlords, particularly older investors like James, 60, who owns four buy-to-let properties in southwest England, plan to exit the market due to low yields—around 3% after costs and taxes—and stagnant property valuations over the past decade, which no longer justify ongoing investment despite improvements and inflation.

As landlords navigate tighter regulations and evolving market conditions, tenants may face firmer eligibility standards and challenges in securing rentals, while landlords balance risk mitigation with changing financial incentives.