Landlord sell-off could push rents higher before summer, agents warn

Landlord sell-off could push rents higher before summer, agents warn

Letting agents are warning that rents could increase again in the coming months as more landlords exit the private rental market.

A recent market snapshot from the Royal Institution of Chartered Surveyors (RICS) indicates that tenant demand has remained broadly steady during the winter months. However, the supply of rental homes continues to be limited because fewer landlords are bringing properties to the market. As a result, around 20% of survey respondents expect rents to rise within the next three months.

Landlords leaving the sector

Many property professionals say landlords are continuing to sell their rental properties, reducing the number of homes available to tenants. This ongoing sell-off is widely linked to concerns about regulatory changes and the future profitability of buy-to-let investments.

Some agents believe the situation is creating a mismatch between supply and demand. With fewer rental homes available but demand remaining strong, rents are likely to continue increasing.

Impact of upcoming rental reforms

Several agents also highlighted the impact of the Renters’ Rights Act, which is expected to come into force soon. Some landlords are reportedly choosing to sell properties when existing tenancies end rather than remain in the rental sector under the new regulatory framework.

Industry figures argue that tighter regulations, along with rising costs and weaker capital growth in some areas, have reduced the incentives for landlords to maintain rental investments. This has contributed to shrinking housing supply in parts of the market.

Limited choice keeping rents high

The reduction in available rental properties means tenants may have fewer options when looking for homes. According to agents, this limited supply is helping keep rents elevated, even as many renters face ongoing cost-of-living pressures.

Wider housing market uncertainty

The RICS report also highlights a degree of uncertainty in the wider housing market. New buyer enquiries fell further in February, while agreed sales remained subdued. Short-term expectations for sales activity weakened slightly, although the longer-term outlook remains more positive, with many professionals expecting activity to increase over the next year.