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From a valuation perspective, there are some considerations in the potential impact the Act may have on properties with a residential investment element:

1. Potential for Lower Income Certainty

One of the most significant shifts is around rent increases. Under the new Act, landlords will be able to review rents once a year. Tenants will also be able to challenge any proposed increases, placing a check on excessive uplifts.

For valuers, assumptions about future income growth may need to be more conservative, with the investors potentially reflecting a higher perceived income risk through the yields they are willing to pay for a property.

2. Tenant-Landlord Dispute Risk

The Act strengthens tenant rights and introduces less adversarial dispute mechanisms (e.g., via tribunals). As a result, rent-setting may not always be purely “market-determined” — tribunal decisions could play a role.

Valuations may need to account for this greater role of mediation, particularly in markets where tenants are likely to challenge rent reviews. This could lead to greater cash-flow variability.

3. Liquidity

Given the new constraints on rental growth and the increased risk of rent reductions (or stalled increases), some landlords - especially smaller, leveraged ones - might reassess their long-term commitment to certain assets. Less predictable income and a more constrained upside may dampen investor appetite, particularly from risk-sensitive investors.

4. Strategic Responses From Landlords and Investors

To manage the impact, stakeholders may start behaving differently:

• Landlords may push for higher initial rents (to compensate for restrained growth), or negotiate stepped / fixed increases rather than relying on annual rent reviews.

• Investors might shift focus towards locations where demand is more resilient.

The Renters’ Rights Act introduces a structural reset in how rent risk is shared between landlords and tenants. For valuers, lenders, and investors, the result may be an increased uncertainty around rental income — particularly in terms of growth, review frequency, and enforceability. This means future valuations may need to assume more cautious rent trajectories and reacting  yields.

However, the impact won’t be uniform. Well-located, high-quality assets in strong demand may weather the change more easily than riskier or secondary/tertiary locations.

If you have any questions regarding SHW’s valuation services, please contact James Sadler.