The long-term health of the private rented sector is a balance between the rights of tenants and the viability of landlords providing the housing tenants need to live.

Neil Hogbin, Partner at Fisher German, believes the Renters’ Rights Act could see rental stock fall as landlords leave the sector, creating further pressure on supply despite demand remaining exceptionally strong.

The Renter’s Rights Act was drawn up with good intentions – to give more rights to tenants.

Higher standards for tenants are well supported across the property industry, and most responsible landlords already understand that providing stable homes for people to live in is their main role.

However, we are already seeing the Act reducing confidence among landlords, which will have knock-on effects for renters.

In recent years, landlords have faced regulatory change, tax reforms, rising compliance requirements and increasing costs. The Renters’ Rights Act arrives against that backdrop.

Some landlords believe these changes have come along too quickly.

We are already seeing evidence of that in conversations with clients. Some are choosing to sell rental properties. Others are deciding against expanding their portfolios. Some investors are looking elsewhere.

Every landlord who leaves the market takes a property with them, which matters, because rental supply is already low.

Demand remains extremely strong across much of the country and many rental properties attract significant interest within days of going on the market. In some locations, would-be tenants are competing against many others for the same home.

A reduction in available stock only increases those pressures.

The likely outcome is greater competition for properties, creating more demand and higher rents. For younger people and those unable to access home ownership, finding a suitable rental property will be even harder.

There is a risk that the Act may backfire. Greater security for tenants is a good thing. However, security means little if the supply of homes continues to shrink and access to the sector becomes more challenging for renters.

That is why landlord retention deserves far more attention. It’s not something policymakers can just ignore.

Landlords who stay in the sector will need to adapt.  At Fisher German, we are advising clients to review their documentation and compliance procedures. Many landlords are also choosing tenants more carefully and having closer relationships throughout a tenancy. These can all reduce risk.

The landlords who are likely to perform best over the coming years will be those who treat residential property as a professional business. Managing a portfolio well is becoming more important than ever.

The private rented sector remains an essential part of the UK’s housing market and will continue to house millions of people. Demand for rental accommodation is unlikely to weaken any time soon.

The bigger question is whether enough landlords will stick around in the aftermath of the Renters Rights Act. If confidence continues to fall and more landlords leave like we are seeing at the moment, the effects will be felt across the market, particularly by tenants competing for shrinking number of homes.