Landlords are rushing to use a little-known protection as a Labour Party government crackdown risks £19,000 bills. Around 400,000 could now be exposed to eviction costs running into tens of thousands of pounds under the government's rental reforms.
Approximately 400,000 property owners are now considered financially vulnerable following the introduction of the Renters’ Rights Act on 1 May, with potential losses reaching as much as £19,000 for a single eviction case.
Ravi Sejpal, Director of Insurance at Karis Insurance, urged landlords to review their coverage arrangements in light of the new rules. "If landlords can't recoup lost rental income, then that can quickly erode any returns they are making from that property," he said.
"Legal disputes can quickly cost thousands, especially if cases drag on under the new Act. Without the right cover, landlords risk being substantially out of pocket just to regain control of their own property."
Rent Guarantee Insurance, which typically costs around £295 annually, provides protection for up to twelve months of lost rental payments.
Craig Morgan, insurance expert at SJL, warned: "The Renters' Rights Act doesn't just change how landlords manage tenancies, it fundamentally changes the financial stakes when something goes wrong."
"An eviction that once cost a few hundred pounds to initiate now can easily cost thousands in legal fees alone, before you even count a single month of lost rent."
One of the most groundbreaking changes is the end of fixed-term contracts. Until now, renters commonly signed a one-year fixed tenancy agreement, which meant they had to pay rent for the whole 12 months even if they left. This is now illegal. All fixed-term assured tenancies and assured shorthold tenancies have been abolished and replaced with rolling periodic tenancies.
Andy Graham, host of The HMO Podcast, says he is already seeing renters serving notice on tenancies that were previously agreed for 12 or even 24 months. "I've seen this happen in several instances already," says Andy. "This is especially problematic where they are a group of students because the landlords will have to wait until the next group move in, which in some cases will be 1 July, leaving them with several months of the property being empty, which costs many thousands of pounds."
