9:47 AM, 5th September 2025, About 4 months ago 3
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An industry body has warned further financial constraints on landlords could cause “huge irreversible effects”.
Propertymark’s latest Housing Insight report for July reveals some landlords are serving Section 21 notices to “problem tenants” ahead of the Renters’ Rights Bill becoming law, as they do not want to take on additional risks.
Propertymark also says speculation over the government’s ambition to tax landlords has “created a worrying backdrop at a time when investment is desperately needed”.
A Propertymark agent in the East Midlands told the report: “Rent arrears are becoming more of a problem as tenants are losing jobs and relying on joint incomes to pay rent.
“Landlords are serving Section 21 notices on ‘problem’ tenants to beat the Renters’ Rights Bill.
“A number of the Section 21 notices would not have been served if the Renters’ Rights Bill had not been incoming. Landlords do not want to run the ‘risk’ of keeping potentially ‘higher risk’ properties now and are deciding to act whilst they can.”
According to the latest report, despite the average number of properties available for rent growing to 13.02 per member branch, demand continues to outpace supply, with the average number of applicants per branch sitting at just over six for each available property.
According to the report, the rental market remains highly competitive as rent prices continue to climb.
In July 2025, the average UK rent was 5.9% higher than in July 2024, with the average rent in England reaching £1,398.
Phil Spencer, founder of Move iQ, warned that if landlords continue to leave the market, rent prices will rise further, and any additional financial costs for landlords will only worsen the housing crisis.
He said: “On the rental side, the market remains competitive, which has played a major part in high rent levels, and many renters continue to stay put in their current homes in fear of being unable to find somewhere else.
“If this trend continues and landlords continue to pull their homes from the market, this is only likely to worsen. The UK government needs to be tactical in its future decisions when looking to fill the black hole in the public finances, and not worsen current housing issues, as any additional financial constraints on landlords could have huge irreversible effects moving forward.”
Media reports on the Autumn Budget, including rumours that landlords could face paying National Insurance on rental income, have sparked major concern among landlords and letting agents.
Nathan Emerson, chief executive of Propertymark, warns these rumours create a “worrying backdrop” when investment is needed in the private rented sector.
He said: “Those working within the private rented sector continue to voice their concerns surrounding landlords withdrawing their homes from the market, and with recent talks regarding the UK government’s ambition to tax landlords even further, this news is creating a worrying backdrop at a time when investment is desperately needed to help house the nation.”
In the residential sales market, the report reveals that house prices have remained static, with the average UK house price at £269,000.
According to the report, the average number of new prospective buyers registered per member branch fell to 65 in July.
Mr Emerson says media speculation that stamp duty could be replaced with a property tax on homes worth more than £500,000 could have serious implications for the housing sector.
He said: “Despite the number of buyers coming to market taking a slight dip this month, the overall number of transactions and appraisals remains buoyant, indicating that consumer confidence is not shaken by wider economic factors. With interest rates improving slightly, this should also be playing a key role in improving home movers’ affordability.
“With speculation circulating regarding potential changes to Stamp Duty in England and Northern Ireland, we encourage the government to focus on reviewing current rates and bands rather than targeting higher-value properties, ensuring they align with rising property prices.
“Historically, reducing or removing property taxes has led to increased transactions, which in turn stimulate spending and drive broader economic growth.”
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Renters' Rights Bill enters final stages next week
Suspicious Steve
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Member Since May 2025 - Comments: 56
7:29 AM, 5th September 2025, About 4 months ago
I fully understand Landlords exiting the market. I really dont understand why there are any new landlords entering the market !
Greedy Angela is anti-landlord and keeps referring to Landlords as greedy.
There’s is very little margin for new entrants.
Using the numbers from this article
Purchase price £269,000
Property bought through a company
Stamp duty £16,900
Capital employed £285,900
Rental income £1398×12 = £16,776pa
Assume no borrowing costs.
Gross yield is 5.8%
We then have companies house filing fees, accountancy, insurance, agent fees, gas safety, selective licensing fees, problem tenants, legal fees. You would be lucky to achieve 4% yield.
The stamp duty cost is only recoverable on disposal as an allowable capital gains expense but there’s no indexation relief so with inflation running at nearly 4% that’s £670 loss each year.
There are plenty of low risk option to get a 4% return out there. For example trading212 cash ISA is 4% (admitted you can only put in £20k). If you want to invest in property then a REIT can easily achieve these yields and is a very liquid asset.
I would love to know who these new landlords are entering the market.
If you pick an area with high rental yields and low purchase prices like Middlesborough it still doesnt make sense.
I wrote this blog post back in 2022
https://heatsave.blogspot.com/2022/12/is-buy-to-let-dead.html
It didnt make sense then and will definitely be a worse outcome now.
Ryan Stevens
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Member Since January 2024 - Comments: 290
11:09 AM, 5th September 2025, About 4 months ago
If you have a company and invest in high dividend yield funds/companies you can probably achieve 4%pa quite easily and with minimal admin, no risk of fines, no need to put your details on a landlord’s register, no need to worry about existing and new regulations, etc.
And the cream on the cake is that dividends are generally not taxable within a company. So that is 4% NO tax, whereas 4% property profits would be subject to tax at 19-26.5% (26.5% is the marginal rate of tax on profits between £50k and £200k), so 2.94-3.24%% net of tax.
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Member Since February 2020 - Comments: 360
11:55 AM, 5th September 2025, About 4 months ago
Reply to the comment left by Suspicious Steve at 05/09/2025 – 07:29
Well, if you could negotiate the price down enough, it could be worthwhile.
If its not worthwhile for the buyer, then it isn’t for the seller, so the price must fall. Unless the houses are being bought by councils or non-landlord buyers?