More than a quarter of landlords are selling their properties
Key Points
- UK landlords are selling off at significant rates following the introduction of the Renters' Rights Act.
- Faced with legislation providing more protections to tenants and narrowing margins, more than a quarter of landlords have sold or are currently selling their properties.
- The NRLA has also warned landlords to back up their propose rent increases with evidence as tenants leverage their new protections to challenge rent increases in record numbers.
Landlords in the UK have been hit by a ‘perfect storm’ and are being forced out of the sector in their droves.
This is according to new data from the National Residential Landlords Association (NRLA), the UK’s largest membership organisation for private residential landlords.
The organisation’s latest research found that 26% of landlords have sold or are currently selling at least some of their properties as a result of the Renters’ Rights Act.
The Renters’ Rights Act was introduced to give more security and protection to tenants renting in England and took effect earlier this year. It removes the ability for landlords to evict tenants without a reason or put up rent unreasonably, in addition to many other improvements to tenant protections.
According to the NRLA’s survey of its members, confidence in the private rented sector has taken a significant hit amongst landlords, hitting close to record lows in England.
The biggest reasons for dipping confidence including rising costs and government policy. Single-property landlords are particularly unsettled, with more than 60% saying they are no longer sure if they will be landlords at all by the end of 2027.
The NRLA said that the Renters’ Rights Act and other new regulations have compounded the rental supply crisis to create a ‘perfect storm’ in the private rental market.
It pointed to the upcoming cost implications of the new Minimum Energy Efficiency Standards (MEES) for landlords which are also expected to take effect soon. These require that landlords’ properties must have an EPC rating of E or above to be rented out privately to tenants, penalising those who flout the regulations with fines of up to £5,000.
The NRLA has also warned landlords to ensure their proposed rent increases are backed up with evidence, as tenants are contested proposed increases in record numbers thanks to new protections offered by the Renters’ Rights Act.
Under the new legislation, landlords are only able to raise rent once a year, and this increase must be in line with the local market rate.
Despite the increase in the number of tenants challenging rent increases by landlords, wait times for these challenges to be processed are decreasing as the government builds out capacity to support tenants in their claims against landlords violating the regulations.
“We have been in the midst of a rental supply crisis for some time now, and with more than five households competing for every rental property and well over a million households on the waiting list for social housing, we simply cannot afford to lose any more homes,” the NRLA said.
“Now, ahead of the Autumn Budget next month, we are calling on Andy Burnham and his Chancellor, John Healey, to recognise the valuable contribution we PRS landlords make when it comes to providing the homes to rent the country so desperately needs.”
