Workers on zero-hours style contracts risk being shut out of parts of the rental market as landlords lean more heavily on rent guarantee cover ahead of the Renters’ Rights Act. A recent tribunal decision highlighted how insurance criteria can decide who gets a tenancy – and who does not.
Tribunal ruling puts insurance rules in the spotlight
The case involved a prospective tenant in Swindon whose application failed after questions were raised over whether his working pattern amounted to a zero-hours contract. The First-tier Tribunal found the landlord had relied on inaccurate information when taking a holding deposit and ruled the deposit did not have to be returned.
For landlords, the wider issue is bigger than one dispute. Rent guarantee products often require applicants to be in permanent employment, which can leave people in flexible work outside standard underwriting rules even when they have regular income. As more landlords tighten risk controls, those filters could become more common.
This follows Landlord Knowledge’s Rent guarantee cover stretches to 18 months as RRA risk rises, which reported how rent protection cover was already stretching as possession risk changed under the new regime. The latest case suggests the next pressure point may be who qualifies for a tenancy in the first place.
Demand for rent protection is climbing
Goodlord said demand for rental protection products has risen sharply since the Renters’ Rights Act received Royal Assent. According to the firm’s data, demand increased 41 percent and 76 percent of surveyed landlords and agents said the legislation had made them more likely to take out cover.
That response is understandable. Once Section 21 disappears, landlords will focus more closely on arrears risk, tenant referencing and the reliability of insurer-backed products. But the practical effect may be tougher screening for applicants whose income does not fit standard templates.
Landlords will also need to make sure marketing, referencing and insurance criteria match from the start. If an applicant is allowed to pay a holding deposit before those checks are clear, disputes can follow quickly.
Landlords can review the underlying source material in the original source.
What this means for landlords
- If you use rent guarantee insurance: check your provider’s employment criteria before marketing the property.
- Watch for: holding deposit disputes if the insurer’s rules and your advert are not aligned from the start.
- Bottom line: insurance may reduce risk for landlords, but stricter underwriting can narrow the tenant pool and create fresh compliance questions.
Editor’s view
Landlords will keep buying protection if possession becomes slower and less certain. The risk is that insurers, rather than landlords, end up deciding who looks acceptable on paper. That may solve one problem while creating another.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 28 April 2026
Sources: First-tier Tribunal, Goodlord
Related reading: Rent guarantee cover stretches to 18 months as RRA risk rises
