Landlords selling up as tenant demand hits new high

Tenant demand continues to climb, but landlords continue to sell amid fears over new legislation.

According to Propertymark’s Housing Insight report, demand continues to exceed supply, with an average of nine applicants per property available per member branch.

The Renters’ Rights Act received Royal Assent last month, but the government has yet to set out a timeline for its implementation, leaving many landlords uncertain about the future.

Landlords are still very wary of Section 21 being abolished

A Propertymark agent from the East Midlands warns of a supply shortage.

The agent said: “There’s a shortage of two-bed houses under £900pcm. Landlords are still very wary of Section 21 being abolished, and we are continuing to serve Section 21 notices now on tenants.”

Another agent from the South West said: “Very worrying, I only have a small portfolio of approximately 50 properties, and four of those (7.2%) have asked me to serve a Section 21.

“As they now want to sell and leave the lettings market altogether, due to the new legislation coming in.”

According to the report, the average number of registrations per member branch rose to 111, while rental arrears also increased slightly, with reported problems rising to 2.6%.

Phil Spencer, founder of MoveiQ, says the government must do more to tackle the supply and demand crisis.

He said: “We’re seeing a market where interest is there in both selling and renting, but the system and the wider affordability environment remain under strain. Delays tell us the engine of the market isn’t yet running smoothly.

“For renters, the continued rise in registration numbers highlights the level of demand. Policymakers and industry really need to act, not just to serve this demand, but tackle the supply, process bottlenecks, financing, and regulatory requirements that create added pressure.”

Positive signals muted by affordability and access pressures

In the residential sales market, the average UK house price stood at £270,000.

While the number of new prospective buyers registered per member branch showed positive momentum, rising to 73 in September, around 35.9% of housing transactions took more than 17 weeks to complete on average.

Only 1% of properties sold for more than the asking price, while 93% were sold for less.

Nathan Emerson, chief executive of Propertymark, echoes Mr Spencer’s thoughts and calls for the government to do more.

He said: “Overall, we are seeing momentum in buyer registrations and in rental demand, which is heartening. But the two big caveats are: one, the transactional infrastructure needs to be more efficient to match that demand; and two, without growth in supply in both sales and rental sectors, we may see these positive signals muted by affordability and access pressures.

“Policymakers and the overall industry must focus not only on stimulating demand but on making sure the system can deliver. The next few months will be pivotal.”

Property118 commercial reality check

Tenant demand is surging while nervous landlords sell into the storm. That imbalance is the clearest signal of all: the market still rewards those who can hold their position with discipline and structure. Regulation is tightening, but professional landlords adapt faster than policymakers.

What serious landlords should do next

Model exit and retention scenarios. On a property-by-property basis. assess capital growth, tax exposure and yield under future legislation before reacting to headlines.

Refinance with purpose. Rising demand supports higher valuations and better loan-to-value positions. Use that equity to rebalance debt or create a buffer for regulatory transition.

Document everything. Audit trails, compliant tenancy paperwork and systemised maintenance records reduce operational risk and preserve sale value if you do choose to exit selectively.

Advantage through professionalism

Competence is now the real differentiator. Investors who treat lettings as a regulated business, not a sideline, will pick up the tenants and properties others walk away from. Process automation, corporate structure reviews and delegated management convert uncertainty into free headspace for strategic growth.