Corporate landlords replacing private buy to let landlords

More corporate landlords will enter the private rented sector in 2025, as they are less impacted by new rules and regulations, while buy to let landlords will leave the sector, claims Leaders Romans Group.

According to the lettings and sales agency, the Renters’ Rights Bill will have a huge impact on the private rented sector but less on the Build to Rent (BTR) sector.

With high demand and low stock expected to continue into 2025, Leaders Romans Group claims the Build to Rent sector could help tackle the supply and demand crisis.

Renters’ Rights Bill will have a significant impact on the private rented sector

Andy Jones, group director of corporate and BTR at Leaders Romans Group (LRG), says new legislation will reshape the landscape of the private rented sector.

He said: “The Renters’ Rights Bill will have a significant impact on the private rented sector, including ending Section 21 ‘no fault’ evictions, replacing fixed-term tenancies with periodic tenancies, limiting rent increases, banning rental bidding, allowing tenants to request permission to keep pets, and ending discrimination against tenants who receive benefits or have children.

“The Bill will also introduce a new ombudsman, create a PRS database, implement a decent homes standard, and apply Awaab’s Law to the sector.

“Its impact on properties under corporate ownership, and specifically Build to Rent (BTR), will be less extreme, however, as many of these practices already exist in the sector.”

High demand persists

Mr Jones adds that 2025 will still see a supply and demand imbalance as corporate landlords look to expand their portfolios.

He said: “As we approach 2025, the lettings industry is entering a phase marked by stabilisation and opportunity. Rental inflation has slowed to an average of 3-4% for new lets, reflecting the effects of affordability constraints and renters’ budgets are beginning to limit how much rents can rise.

“Despite this moderation, high demand persists, especially in regions with limited rental stock, providing considerable opportunity for investment.

“Supply remains constrained, with data showing that around 12% of current property sales are from landlord disposals: again, an opportunity for corporate landlords who are less impacted by regulatory changes – such as the emerging requirements concerning tenancy agreements and energy efficiency.”

BTR solution to supply and demand crisis

Mr Jones says the key to tackling the supply and demand imbalance could lie with the Build to Rent (BTR) sector.

He said: “Against the backdrop of the Renters’ Rights Bill and greater regulation for the PRS, the BTR sector is emerging as a key solution to the PRS’s supply-and-demand crisis.

“Already, institutional investment in BTR developments has skyrocketed, with the British Property Federation reporting a 23% growth in completed BTR units over the past year alone.

“The sector now boasts over 120,000 completed homes, with a pipeline exceeding 273,700. Initially concentrated in London, BTR developments are expanding regionally, reflecting a growing appetite for professionally managed rental housing nationwide. Regional growth in BTR units (31%) has outpaced London (13%), demonstrating the sector’s broader appeal.”

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