The Renters’ Rights Bill is encouraging landlords to be more selective about tenants, charge more rent and spend less on maintenance, and many think the reform will be negative for the sector.
According to Pegasus Insight, which ran its inaugural Landlord Trends workshop today, around 81% of landlords surveyed thought the Renters’ Rights Bill would have a negative impact on the private rented sector (PRS), and the removal of no-fault evictions was a top concern. This was followed by concerns around changes to capital gains tax (CGT).
The report stated that the Renters’ Rights Bill was already changing landlord behaviour, with 81% of landlords saying they will be more “selective” about their tenants once the bill is brought in, while 62% said they would increase rent.
Nearly a quarter said they would look to cut costs by spending less on maintenance.
Only 5% of landlords surveyed plan to increase the size of their portfolios in the coming year – a record low – and 41% plan to sell.
Of those who intend to buy, the average purchase amount is estimated at 1.9 properties and those who plan to sell want to sell around 2.9 properties.
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The report found that, in 2010, landlords with one property made up 78% of the PRS, but that decreased to 45% in 2024.
The research also found that around half of PRS property is owned by just by a fifth of landlords.
Pegasus Insight said this trend was likely to accelerate the trend of PRS concentration.
‘Findings present a stark warning to government’
Bethan Cooke, Pegasus Insight’s director, said: “We were delighted to welcome such a large group of buy-to-let specialists to our first workshop, to analyse our research and discuss the future of the PRS. The findings of this research can help lenders plan ahead as they look to cater for the changing needs of buy-to-let investors in a pressured and professionalising market.
“But mortgage lenders can only do so much. These findings present a stark warning to government. It must find ways to nurture the PRS and encourage more investment in the sector if we are to avoid severely deepening the UK’s housing crisis. As a start point, the government should promise policy stability in order to boost landlord confidence. It seems too late to turn back the clock on the Renters’ Rights Bill, but the government should commit to no more legislative changes and no further tax increases for landlords.
“Research we carried out before the last Budget revealed that 39% of landlords would stop investing and 19% exit the market if CGT on the sale of second properties were increased. Rachel Reeves made the right decision in not hiking capital gains tax in October 2024. She must not be tempted to squeeze landlords further in future.”
