Landlord exodus threatens the UK’s PRS – survey

A looming crisis will hit the UK’s private rented sector as two-thirds (67%) of landlords say they will either leave, reduce their portfolio size or switch to short lets this year.

The research conducted by SpareRoom reveals that just 4.5% of landlords are planning to buy in 2025.

It found that confidence among landlords has plummeted to a record low, with 88% expressing disillusionment with the present private rental landscape.

In London, this figure is 90%.

‘Have their life savings tied up’

A director of the firm, Matt Hutchinson, said: “Not all landlords are big businesses. Almost half (45%) only have one rental property, some of whom have their life savings tied up in their rental property.

“If landlords feel like they have no choice but to leave the market, renters will suffer.

“Lack of supply is already inflating rents, but if landlords follow through on their intentions, the problem will become even more severe.”

He added: “It’s evident the current rental market isn’t working for anyone – tenants or landlords.

“The sector needs change that protects and incentivises supply. If the Government wants stability and affordability, then change has to work for everyone.

“While common-sense rent reforms will offer tenants greater protection, there is neither support nor incentives for landlords, and nothing in place to protect the market from volatility, which is what we’ll see more of if landlords don’t see the sector as an opportunity worth investing in.”

Reduce long-term housing availability

SpareRoom says that a substantial 34% of landlords intend to leave the sector entirely this year, a move that will drastically reduce long-term housing availability and push rents.

Almost a third (29%) aim to reduce their property numbers, while 4% are preparing to switch to holiday rentals.

London’s PRS faces a particularly acute situation, with 42% of landlords there contemplating an exit from the market this year.

The Renters’ Rights Bill, currently undergoing its second reading in the House of Lords, is cited as a major factor in this declining confidence.

Contributing to the landlord exodus

Concerns surrounding the abolition of Section 21 ‘no-fault’ evictions, lower profitability and increased capital gains tax are also contributing to the landlord exodus.

Landlords further report experiencing stress and anxiety due to financial uncertainties, jeopardised retirement plans and worries over future government intervention.

More than half (51%) of landlords feel their well-being has suffered due to their role in the past year.

Landlords shared their experiences for the research, with these quotes:

• “I’m a decent landlord and provide a nice flat that is decorated to a good standard. From 2025 landlords will have no protection. This is my pension, and I need the same protection as tenants.”
• “I’m a small landlord who is worried that I’ll have to sell and end what is essentially my pension plan, due to government changes in the private rental sector. I am a good landlord who tries to look after my tenants, but I’m unable and unwilling to deal with the complete handover of control of my own properties to tenants.”
• “There is now no incentive to let properties. The reward was marginal for a long time but is less than that now, so it is not worth the risk, effort and expense. It is better to withdraw from the market and simply put the money in an index fund. Less risk, far less work, less of a tax penalty and overall, far less stress.”

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