How to protect your rental income following Renters’ Rights Act changes

The Renters’ Rights Act marks the most significant reform of the private rental market in nearly four decades.

For landlords, this presents both opportunities to enhance their offerings and challenges, such as stricter compliance requirements, longer eviction timelines and increased financial pressures.

Navigating these changes requires foresight and preparation. Gallagher, the NRLA’s trusted rent guarantee insurance partner, breaks down how rent protection can help you stay prepared.

How the Renters’ Rights Act may impact your insurance needs

The Renters’ Rights Act reshapes the landlord-tenant dynamic by placing increased responsibility on landlords in the private rental sector, with clear consequences for non-compliance.

Changes to repossession grounds

Landlords will be prohibited from regaining possession of their properties without a valid reason. Instead, they must now rely on Section 8 grounds for possession, which can be often slower and more complicated to prove in court, particularly in cases of persistent rent arrears or disruptive tenant conduct.

Updated repossession grounds, such as selling property or accommodating family members, remain available. However, these grounds now require stricter adherence to Section 8 processes: for example, providing documented proof of intent to sell. Additionally, landlords may be required to provide tenants with longer notice periods, including a protected period of 12 months from when tenants first move in.

How insurance can help: Legal expenses and rent guarantee insurance can provide a crucial safeguard for a landlord's income during repossession processes.

All tenancies move to periodic (rolling) agreements

With fixed-term contracts nullified, landlords face greater uncertainty over tenancy durations. While tenants gain flexibility, landlords may find it harder to forecast cash flow and manage void periods.

How insurance can help: Legal expenses and rent guarantee insurance can help to ensure the continuity of income if tenants vacate unexpectedly or default on their rent.

Introduction of a new Ombudsman and mandatory redress scheme

Landlords will be required to join the new Private Rented Sector Ombudsman, with disputes handled through binding redress. This raises compliance demands and may increase legal costs if cases escalate.

How insurance can help: Legal expenses and rent guarantee insurance can help to cover the financial impact of managing disputes.

How rent guarantee insurance adds a vital layer of protection

Under the Renters’ Rights Act, evictions may take longer, and arrears become more common. This is where legal expenses and rent guarantee insurance can become invaluable.

Key benefits of Gallagher’s legal expenses and rent guarantee insurance include:

• Financial protection against unpaid rent.
• Cover for the cost of legal advice and representation when evicting a tenant.
• Cover for the cost of eviction proceedings when evicting a tenant due to rent arrears.
• A mediation service during the claims process to help landlords and tenants reach an agreement.
• Up to 5 tenants can be covered on one policy. All tenants must be on a single tenancy agreement.
• Cover can be offered for an existing tenancy agreement. A 90-day claim exclusion period from the policy start date may apply unless you had continuous insurance.
• Following the successful eviction and vacant possession is gained, a further payment may be able to be made for a 3-month period until the property can be relet.
• Policy documentation written in simple language, showing what is and isn’t covered.
• Access to additional insurance offerings, such as landlord insurance.

Final thoughts: Are you prepared?

For landlords, the Renters’ Rights Act means adapting to new responsibilities and evolving tenant rights, both of which present financial implications. But with the right strategy, these changes can be managed confidently and sustainably.

When considering the next steps, it’s important to assess your preparedness for the new changes. Here’s a mini checklist to help you steer the transition smoothly and stay ahead of the curve.

• Review all current tenancy agreements and compliance obligations.
• Ensure your property meets the new Decent Homes Standard.
• Budget for potential compliance and maintenance costs.
• Reassess your financial risk exposure under the new eviction rules.
• Secure or upgrade landlord insurance to cover property, liability and legal expenses.
• Add rent guarantee insurance to ensure income continuity during arrears or disputes.

With decades of expertise and a partnership built on trust, discover how Gallagher can support your insurance needs.

Legal expenses and rent protection from Gallagher

You can take every step to make your buy-to-let investment successful, but despite your best efforts, some situations are unpredictable. Legal Expenses and Rent Guarantee Insurance can help to provide peace of mind that if issues out of your control occur, such as a tenant failing to pay rent and remaining in the property, you have insurance in place.

How landlord insurance can complement rent guarantee insurance

Rent guarantee insurance specifically addresses rent arrears, helping to offer income protection, while landlord insurance can help to protect the building and contents, offering peace of mind.

Gallagher can also provide NRLA members with Landlord Household Insurance.

The sole purpose of this article is to provide information on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited and National Residential Landlords Association, an Introducer Appointed Representative of Arthur J. Gallagher Insurance Brokers Limited, accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.

National Residential Landlords Association is an introducer appointed representative of Arthur J. Gallagher Insurance Brokers Limited, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 55 Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909.