A record number of landlords – now fewer than 88% – have no confidence in the current private rental sector, a figure that increases to 90% in London.
The data comes from flat sharing website SpareRoom, which says that its survey shows over a third (34%) of landlords planning to leave the sector altogether this year, spelling a stark reduction in long-term rental supply and higher costs for tenants.
Almost one in three (29%) landlords plan on reducing the size of their portfolios this year, while 4% prepare to switch their property to a ‘short-term holiday rental’. In London, this is more acute, with 42% of landlords claiming they plan to exit the market in 2025.
| Landlords: What are your plans for 2025? | % of UK respondents | % of London respondents |
| I plan to leave the rental market | 34.1 | 41.5 |
| I’m planning to reduce my portfolio | 29.3 | 28.6 |
| I’m not planning any changes | 28.3 | 35.4 |
| I’m planning to expand my portfolio | 4.5 | 2.4 |
| I plan to invest in holiday/short-term lets | 3.8 | 2 |
The primary reason for the lack of landlord confidence is due to the upcoming Renters’ Rights Bill which had its second reading in the House of Lords this week.
Many are concerned about the end of Section 21 – the right for a landlord to issue a no-reason eviction. The reduction in profitability in the current market as well as the newly increased capital gains tax is also proving to be a sticking point.
Of the 88% of landlords with not confidence in the private sector, these are the reasons why:
| Reasons | % of UK respondents |
| Renters’ Rights Bill | 88.3 |
| End of Section 21 | 74.8 |
| Reduced profitability | 70.4 |
| Tax increases | 65 |
| Too risky | 56 |
| Capital gains tax | 54.6 |
| Mortgage rate rises | 48.4 |
| Unstable market | 29.8 |
| Decline in property value | 23.6 |
Landlords surveyed also expressed feeling stressed and anxious due to money concerns and the precarious position of their retirement plans, as well as apprehension about future government intervention. More than half (51%) believe being a landlord has negatively affected their health and wellbeing in the past 12 months.
SpareRoom director Matt Hutchinson says: “Not all landlords are big businesses. Almost half (45%) only have one rental property, some of whom have their life savings tied up in their rental property. If landlords feel like they have no choice but to leave the market, renters will suffer. Lack of supply is already inflating rents, but if landlords follow through on their intentions, the problem will become even more severe.
“It’s evident the current rental market isn’t working for anyone – tenants or landlords. The sector needs change that protects and incentivises supply. If the government wants stability and affordability then change has to work for everyone.
“While common-sense rent reforms will offer tenants greater protection, there is neither support nor incentives for landlords, and nothing in place to protect the market from volatility, which is what we’ll see more of if landlords don’t see the sector as an opportunity worth investing in.”
Yesterday we reported a poll by finance firm Octane Capital which also showed an upcoming exodus of landlords, mostly blaming the Renters Rights Bill for their feeling obliged to sell up.
This article is taken from Landlord Today