PRS value falls by £48bn as small landlords sell

The value of homes in the private rented sector (PRS) fell by £48bn in 2025, marking the largest annual contraction recorded this century, according to analysis from Savills.

Over the past three years, the PRS has shrunk by £79bn, even as the wider housing market continued to grow.

That’s down to smaller landlords selling to owner occupiers and larger portfolio landlords.

Savills calculates that the value of the national housing stock increased by £336bn over that period, a rise of 3.8%.

Private rented housing is the only tenure to have declined during those three years and has dropped by 5.1%.

Portfolio landlords buy some homes

Lucian Cook, the head of residential research at Savills, said: “Over the past 25 years, we’ve grown accustomed to a story of the private rented sector expanding at the expense of people’s ability to get onto the housing ladder.

“But while deep-seated housing challenges remain, lighter regulation in the mortgage market and tighter oversight of the private rented sector are gradually beginning to shift that narrative.

“Changes in tenancy legislation, higher operating costs and increased mortgage rates have prompted many private landlords to reassess their portfolios.”

He added: “Larger landlords, better equipped to absorb added costs and requirements, have taken on some of this stock, contributing to a more professionalised PRS.

“But others have been sold to owner-occupiers, reducing the sector’s overall size.”

Owner occupied sector grew

Savills says that the value of owner-occupied housing rose by £185bn in 2025, with increases among both mortgaged households and those that own their homes outright.

It attributes part of that growth to first-time buyer activity.

The increase in the value of privately owned housing since 2022 has also been supported by rising mortgage borrowing among homeowners.

Outstanding mortgage debt held by owner-occupiers has increased by 4.7% over the past three years.