There’s been no shortage of criticism aimed at landlords in recent years. From rising rents to housing shortages, we’re often painted as the villains of the housing crisis. But dig a little deeper, and a very different story emerges — one where us landlords are just as squeezed as tenants, and the private rented sector (PRS) is buckling under pressure from all sides.
Rents Are Rising — But So Are Landlords’ Costs
Recent data shows that nearly 60% of landlords have raised rents over the past year, and over a third expect to increase them again in the next six months. We look at reasons why landlords may have had to raise rents:
- Mortgage costs soared as interest rates climbed. For many, repayments have risen by more than £2,500 per property per year.
- Rental yields are shrinking. Net profits have fallen from around 3.5% to just 2.5%, according to the Bank of England.
- Tax changes introduced over the past decade — such as the phasing out of mortgage interest relief — have significantly increased landlords’ tax bills.
So it’s no surprise landlords are raising rents. Many are simply trying to stay afloat.
So Why Are Landlords Selling Up?
You’d think that with such strong demand, landlords would be expanding. Instead, many are leaving the market altogether.
- In the first quarter of 2025, 15.6% of all homes listed for sale were former rental properties — up from 9.8% the year before.
- Over 18,000 rental homes are estimated to have exited the market in the last year alone.
- One in four landlords sold a property in 2024, while only 8% bought another.
With demand higher than ever, why are landlords quitting?
Part of the answer lies in rising costs, increasing regulation, and the uncertainty surrounding future reforms — like the upcoming Renters Reform Bill, changes to EPC regulations, and the ongoing ban on Section 21 evictions.
Other Landlords May Be Fearful of The Impact on Tenants
- A growing number of tenants are already struggling with affordability, and arrears are on the rise.
- The situation is only ever likely to get worse as successive governments find new ways to raise more money from landlords.
If landlords have to raise rents to stay viable, but tenants are already stretched to the limit, something has to break.
For some landlords, the decision is already made — they’re stepping away before the fat hits the fire and people get burnt in the aftermath.
What Happens Next?
The private rented sector is at a crossroads. Landlords are under pressure. Tenants are under pressure. And the PRS, as we know it, is caught in the middle.
If things continue as they are, we risk a situation where only large institutional landlords – with less empathy, more distance between them and the tenants; and bigger purses to reclaim their properties – remain.
Small landlords, the backbone of the PRS, are already leaving. Unless something changes, many more are likely to follow.
If you are a landlord who is considering your future in the PRS, please get in touch to find out how we can help you sell your properties – even with sitting tenants in situ – fast for 85 – 90% of the estimated market value.