Tenant demand surges as landlords continue to sell
12:01 AM, 19th August 2026, 3 weeks ago
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Tenant demand has risen to its highest level in two years, as concerns over landlords selling their properties continue to grow.
Data from Pegasus Insight shows 63% of landlords now describe tenant demand in their areas as either ‘very strong’ or ‘quite strong’, up from 58% in Q1.
This marks the first quarterly increase since Q1 2024, following two years of consistent decline.
Millions of households rely on PRS
According to the findings, almost three in ten landlords (29%) now describe tenant demand as ‘very strong’, up seven percentage points from Q1, while 34% report ‘quite strong’ demand.
The proportion describing demand as ‘average’ has fallen from 29% to 23%, while just 5% say demand is weak.
However, Pegasus Insight warns that landlords remain more likely to sell than purchase properties, while rising tenant demand and concerns over supply continue to put pressure on the number of homes available to rent.
Mark Long, founder and director of Pegasus Insight, said: “Tenant demand has been gradually normalising from the exceptional levels recorded in 2024, so a five percentage point rise this quarter suggests that the need for rental accommodation remains considerable.
“It is particularly notable that the increase is being driven by landlords reporting very strong demand. Almost three in ten now fall into this category, while just 5% describe demand as weak. These figures are an important reminder that millions of households rely on the PRS for their homes and that sufficient rental supply is essential to meeting that need.”
Landlord appetite for investment remains weak
He adds government legislation must be balanced to stop landlords from leaving the market.
He said: “The concern is that demand is beginning to strengthen again at a time when landlord appetite for investment remains weak, with far more landlords still looking to sell property than buy. Any further measures that discourage investment or prompt more landlords to reduce their portfolios risk widening that imbalance.
“If demand continues to recover while the stock of available rental homes contracts, the pressure will ultimately be felt by tenants through reduced choice and higher rents.
“At a time when housing supply is already constrained, policy needs to recognise the vital role played by private landlords in providing homes.
“The priority should be encouraging investment and retaining existing rental stock, and the new government should be wary of introducing further barriers that risk reducing supply.”
Tags:
housing supply and demand, Landlord investment concerns, Landlords Selling, peagsus insight, tenant demand
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Member Since October 2022 - Comments: 260
8:57 AM, 19th August 2026, About 3 weeks ago
It’s too late unless government shows a dramatic change of attitude. We have been demonized, shamed and unfairly taxed for so long, and our role publicly reduced to that of extractive capitalist that few landlords other than corporations are willing to invest. And even those are getting cold feet. Apparently this kind of behaviour is known as “The doorman fallacy”.
In the meanwhile I’m about to see a panicked tenant to try to help get them out of a bind.
Member Since September 2023 - Comments: 117
10:06 AM, 19th August 2026, About 3 weeks ago
As the number of properties available goes down rents go up!
No surprise!
Member Since May 2022 - Comments: 105
10:13 AM, 19th August 2026, About 3 weeks ago
If only someone had told the Government, or better still, if one of its own people involved in housing, a Minister or Whitehall official, could have considered the outcome of their actions ….alas, it seems not possible.
Member Since October 2019 - Comments: 433
1:46 PM, 19th August 2026, About 3 weeks ago
It’s only a matter of time before the authorities force LLs who have vacant property over a certain length of time are forced to take in tenants! Also, any property the authorities consider is then not up scratch the LL will be issued with a nice juicy fine – a win win situation for the authorities! It’ll come !!
Member Since October 2023 - Comments: 251
4:18 PM, 19th August 2026, About 3 weeks ago
Landlords pay an estimated £95 BILLION in tax in the UK each year.
I take it the government has never heard of the “killing the goose that lays the golden egg” story?
Member Since November 2023 - Comments: 12
9:27 PM, 19th August 2026, About 3 weeks ago
The government taxed us to the hilt and got shocked when rents went up.
Member Since September 2023 - Comments: 117
7:20 AM, 20th August 2026, About 3 weeks ago
So many landlords are selling their properties, paying CGT, and putting the money in high yielding deposit accounts!
Member Since May 2018 - Comments: 2489
5:42 PM, 21st August 2026, About 3 weeks ago
Reply to the comment left by Peter Merrick at 19/08/2026 – 08:57
On average the after tax return for landlords before the Labour Renters Rights Act was about what landlords can get from premium bonds. Wherever governments introduce rent controls they drive rents up. Rent controls drive rents up and they take many forms:
https://en.wikipedia.org/wiki/Rent_control
The Labour Renters Rights Act contains rent controls but labour are avoiding calling them that. This is dishonest. But it is also dishonest to claim you are going to grow the economy then increase employers national insurance, drop the level at which it is paid and try to give employees employment rights on day one. It is dishonest to say that you are going to build 1.5 million new homes when you are simultaneously attacking investment in property and driving up the cost of building.
Portugal didn’t have any choice other than to liberalise its housing market and reverse its rent controls:
https://www.globalbankingandfinance.com/portugal-launches-reform-liberalise-rental-market-speed/