0:01 AM, 30th April 2025, About 9 months ago 12
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A looming shortage of rental properties threatens the private rented sector as a significant portion of landlords prepare to offload their investments, a study reveals.
The news comes just a day after the peer Lord John Bird claimed that fears of a landlord exodus are ‘unfounded’.
According to a study by Pegasus Insight, 37% of landlords intending to sell within the next year – and just 22% of landlords are planning to remain indefinitely.
It also found that 28% of the rental homes sold remained in the PRS.
The firm’s Landlord Trends report points to a sharp rise in divestment intentions compared to three years ago, when just 20% planned to sell.
Pegasus’ founder and director, Mark Long, said: “These results suggest a large cohort of disillusioned landlords, worried about the future of the sector and further demands the government might place on them.
“Our research confirms that many landlords are deeply concerned about the impact of the Renters’ Rights Bill, energy efficiency requirements and a potential hike in Capital Gains Tax on buy to let property.
“The fact that so many feel impelled to sell up despite the underlying health of this market is particularly galling.”
He adds: “A proportion of the intended sales will be down to selective pruning by larger landlords, and some of the divested property will be hoovered up by other landlords.
“But there’s no doubt that the volume of stock in the PRS will reduce in the next 12 months.”
He warns that strong tenant demand will push up rents and the government must now do something to help landlords remain in the PRS.
Meanwhile, landlord interest in expanding portfolios has plummeted from 18% to just 6%.
The survey found that 22% of landlords have sold a property in the past 12 months, compared to just 6% who purchased one.
Highly leveraged landlords, particularly those with four or more buy to let mortgages, are the most active, with 31% selling and 11% buying in the last year.
However, only 28% of sold properties remained in the PRS, with 67% acquired by owner-occupiers, including 31% by first-time buyers.
This trend suggests there will be a big reduction in available rental stock.
Despite robust tenant demand — 73% of landlords report strong or very strong interest in their properties — and a steady average rental yield of 6.3%.
More than half (58%) of landlords have a clear exit strategy, and 39% anticipate leaving the market within five years.
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Crouchender
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Member Since January 2023 - Comments: 310
6:47 AM, 30th April 2025, About 9 months ago
Finally a report that is talking reality on the ground level. Whilst not a headline grabbing exodus it certainly shows that by the end of Labours reign PRS will be well and truly broken. Hopefully tenants will wake up and realise why they should not have voted Labour.
Markella Mikkelsen
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Member Since August 2022 - Comments: 100
10:01 AM, 30th April 2025, About 9 months ago
As I have always said –
If they are looking for the cliff edge in the numbers of properties, they won’t find it.
Landlords are selling as and when a property becomes vacant. So the graph will look like a steady and constant attrition, heading South.
Paul Essex
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Member Since June 2019 - Comments: 687
10:53 AM, 30th April 2025, About 9 months ago
I am not convinced any of us are going to be around indefinitely, I hope the question was phrased better than that.
A much more interesting question would be just how many landlords likely benefactors are interested in keeping up the portfolio.
Reluctant Landlord
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Member Since September 2018 - Comments: 3392 - Articles: 5
11:03 AM, 30th April 2025, About 9 months ago
Reply to the comment left by Paul Essex at 30/04/2025 – 10:53
very true. I am trying to simplify the portfolio (keep only the easy lets, props in good areas etc) so that when I step back, either it can be handed over to one of the benefactors to run it on behalf of the others to provide a residual income OR it gets put into the hands of a trusted agent to manage the lot.
The other possibility is that the portfolio is split up and divided out so that the benefactors each are given a property for their own personal use going forward. This allows them an asset for which they can choose to do with it what they see fit. Live in, sell etc…
Imout Ofhere
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Member Since August 2024 - Comments: 24
21:46 PM, 30th April 2025, About 9 months ago
As the corporate landlords swallow up more of the smaller landlord operations (as the government intended all along) the rest will drop out…
Think it’s bad now, wait until you have to do quarterly tax returns to HMRC,
starting next April at income (gross by the way) over 50k.
Over the following two years that requirement will drop to 20k income…..more landlords will drop out as the returns are just not worth it.
Another one of mine, bungalow, will be up for sale soon…once I sort out the 10k worth of damage and neglect that has been dished out to it…….I don’t need the hassle when I can get a bigger net return in other investments.
Mr Blueberry
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Member Since August 2023 - Comments: 65
5:07 AM, 1st May 2025, About 9 months ago
Lord Bird and the Labour Government are saying, on the advent of the RRB that PRS Landlords are welcoming the new legislation and increasing in NUMBERS and the tenants will get lower rents and 1.5M more homes.
This is reminiscent of President Trump saying that America will be better off because it is the Chinese who are paying the tarrifs not the American citizens.
Governments have no shame in lying and using the media and well funded charities to embellish the lies that they are providing 1.5M more homes and that landlord are jumping on the bandwagon and increasing in numbers because they are making vast profits while providing appalling accommodation.
However the truth is Trumps tariffs are paid for directly by Americans as an import tax. The result is prices of imported goods are increasing in the US.
Similarly, in the UK landlords are being taxed more so rental properties are being sold leaving less homes for tenants. And because there are less homes available for tenants, rents are increasing.
Godfrey Jones
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Member Since September 2024 - Comments: 95
11:30 AM, 1st May 2025, About 9 months ago
I have let all my Tenants go and am selling everything. Too many restrictions. Not enough profit. And after my last lot of tenants I’ll be glad to get out. I can’t imagine the nightmare of not being able to serve a sec 21 or get your property back!
The stupid part about all this is: we need rental homes and the system, although not perfect, ticked along nicely for years. Why change it and why vilify Landlords? If it ain’t broke leave it alone. I’M OUT! Good luck to those of you who decide to carry on renting – you’ll need it.
Ross Tulloch
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Member Since April 2017 - Comments: 163 - Articles: 1
19:30 PM, 1st May 2025, About 9 months ago
The war on landlords and tenants continues. I’ve been a very good boy and sold four of our properties and we plan another 4 to go. Which will leave us just with four which will no doubt at some point go. It is absolutely clear that the people putting in regulations have absolutely no idea what they are doing and do not understand the unintended consequences. Sad for all the tenants.
Tiger
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Member Since October 2024 - Comments: 166
9:06 AM, 4th May 2025, About 9 months ago
Reply to the comment left by Imout Ofhere at 30/04/2025 – 21:46
The ones who have properties within a company may stay a bit longer. I inherited one property recently. I decided to keep it in our names rather than the company, as I wish to sell it. There will not be any capital gains on it, as I believe value of it will not exceed the valuation done at the time of my dad’s transition over 2 years ago. Another property, I hope to sell by the time my fixed term of mortgage ends, at the end of the third quarter of the year 2027. So put it for sale in about 2 years, if not before.
GlanACC
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Member Since March 2023 - Comments: 1465
8:48 AM, 5th May 2025, About 9 months ago
I have taken a different tack. Had 18 properties and sold 12 so the remaining 6 are all paid for (and the tenants are 100% sound and have been there for years). I am in a position that I don’t need the rent so I try and spend as much rent received as possible on improving the properties, just added a conservatory to one – improving the property value for when it is sold (that will be when the tenant dies, or I die or the tenant leaves).