PRS crisis deepens as landlords plan exit and rents surge

The deepening crisis in the UK’s private rented sector has been laid bare with a survey revealing that landlord confidence has taken a knock with 67% believing the PRS has worsened.

The survey by Total Property highlights that nearly half (49%) of landlords are planning to leave the PRS within five years.

The firm questioned 3,500 landlords, tenants and agents to reveal a sector under pressure – with many landlords worried about the legislative changes under the Renters’ Rights Bill.

Just 3% of landlords have entered the market recently, compared to 75% who have been operating for over a decade.

PRS is undergoing significant change

The firm’s chief executive, Eddie Hooker, said: “The private rented sector is undergoing one of the most significant periods of change we’ve seen in decades.

“Rising costs, increasing regulation and shifting tenant expectations are reshaping the market, and this survey reveals just how deep these challenges run.

“With nearly half of landlords considering leaving the sector in the next five years or reducing the size of their portfolio, and tenants struggling with affordability, urgent action is needed.”

He added: “What’s particularly concerning is that the vast majority of landlords have been in the market for over a decade, while new investment has slowed to a trickle.

“The fact that so few new landlords are entering the sector is a clear indicator of where the market is heading.”

Landlords planning to leave

Of those landlords planning to leave regulatory changes play a big part, including the abolition of Section 21 ‘no-fault’ evictions (29%) and the Renters’ Rights Bill (24%).

For a third of landlords, compliance burdens are an issue, along with rising costs (19%) and tax changes (15%).

Total Property brands include government-approved schemes mydeposits, Property Redress and Client Money Protect plus Total Landlord and Landlord Action.

Mr Hooker said: “While strengthening tenant rights through increased regulation is vital, on the other side of the coin, landlords have little incentive to reinvest in the market under current conditions.

“Unless this changes, these protections will mean little, as we risk a crisis where tenants have nowhere to rent at a price they can afford.”

He adds: “Regulation must support both landlords and tenants fairly to strike the right balance and create a sustainable rental market for the future.”

Tenants are facing affordability challenges

The survey also reveals that tenants are facing affordability challenges, with 88% citing rising rents as their biggest concern.

A lack of available properties is creating hardship, impacting 49% of renters.

Despite these difficulties, 64% of tenants feel secure in their current homes.

And just 6% of tenants feel the right to request a pet is the most important provision of the Renters’ Rights Bill.

Letting agents report difficulties navigating regulatory changes, with 76% citing compliance as a primary worry.

A shortage of rental properties impacts 61% of agents, and 73.5% feel less supported by the current government.

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