The UK's private rented sector has been severely impacted by the exodus of small landlords, with over 850,000 properties exiting the market in just a decade. One in five homes previously rented have since been sold and are no longer available for rent, with many attributing this loss to difficulties in navigating new legislative requirements.
Smaller private landlords are struggling to keep up with the costs and complexities of adhering to additional regulations, unlike larger operators with extensive portfolios and dedicated management teams. These larger players have seen an increase in rental supply, predominantly driven by purpose-built developments, which account for most of the growth so far this year.
Nick Huntley, Director of TwentyEA, noted that despite a 17% rise in overall rental supply compared to last year, traditional letting agents are still facing challenges due to a reduction in available stock as landlords leave the sector. He stressed that purpose-built housing is a positive development for renters but does not replace the vital role played by private landlords in maintaining a healthy and diverse rental market.
Rental demand remains high across most regions, with Wales and the Midlands experiencing significant price inflation, while the East of England saw the largest price deflation at 7.7% year-on-year, followed closely by Yorkshire and the Humber at 4%. In contrast to other regions, supply growth has outpaced demand in 10 out of 12 UK regions, leading to an increase in available rental homes.
Mr Huntley believes this shift towards a better-balanced market could alleviate competition for renters and letting agents. If sustained, this trend may lead to a more stable environment where both parties can thrive, easing the intense pressures experienced by the market in recent years.