Housing market faces challenges with the Renters’ Rights Bill and oversupply

The UK’s housing market is navigating turbulent waters as the Renters’ Rights Bill is already sparking unease among landlords, with many contemplating selling up, one index reveals.

According to Home.co.uk’s latest Asking Price Index, the national average asking rent has dipped by 0.7% annually, a stark decline when adjusted for inflation.

This downturn, driven by a 22% surge in rental property supply, is most pronounced in London, the West Midlands and Yorkshire.

Conversely, the East Midlands shines with a robust 9.3% year-on-year rental growth.

Landlords are anxious

Home.co.uk said: “Understandably, such a fundamental shake-up of the PRS is causing concern and anxiety among landlords, many of whom are considering or actively quit­ting the sector.

“This negative sentiment is only adding to the numbers of proper­ties being placed on an already bloated market.”

On the sales front, a wave of buyer enthusiasm, bolstered by seasonal trends and hopes of further mortgage rate cuts, has nudged home prices upward.

Scotland, Wales and most English regions saw price increases in March, though Greater London lagged due to an oversupply of properties.

Home.co.uk said: “Oversupply is a growing prob­lem as ever greater numbers of vendors instruct agents across the UK.”

Record levels of stock

The platform says that record sales stock levels, the highest for April since 2013, signal potential trouble ahead, especially as demand is expected to wane post-stamp duty deadline.

Annualised price growth remains modest at 1.4% across England and Wales, up from 0.8% in April 2024, but still below the 2022 peak.

Southern regions, where rental yields are slimmer, continue to show the weakest growth.

As the Renters’ Rights Bill approaches, its impact on landlords could further swell the market with properties, potentially cooling prices, the index reveals.

It warns that with these dynamics at play, the housing market remains a complex landscape for buyers, renters and landlords alike in 2025.