Landlords quit rental market as renters rights bill approaches

Landlords are increasingly withdrawing from the private rental sector ahead of the anticipated Renters’ Rights Bill, according to one of the country’s leading estate agency groups. The Property Franchise Group, whose portfolio includes Hunters, Fine & Country and EweMove, has seen the number of rental properties it manages fall from 153000 to 150000 in the past year.

Gareth Samples, chief executive of the Property Franchise Group, stated that the upcoming legislative changes are prompting some landlords to exit the market, with many wary of further regulatory shifts. The Renters’ Rights Bill, which is expected to come into force next June, is the most significant overhaul of rental legislation since 1988. Its provisions include the abolition of nofault evictions, strengthened powers for tenants to challenge rent hikes and a ban on discrimination against those receiving benefits.

Rising levels of regulation combined with speculation that rental income may soon be liable for national insurance have discouraged landlords, while escalating compliance obligations are cited as factors driving the exodus. This trend is contributing to continued upward pressure on rents across the UK. Although the supply of rental homes has improved marginally since last year, the market remains tight compared to prepandemic levels. Rightmove data reveals that rental availability is still 27 per cent below that of 2019, and the average advertised monthly rent in the UK has reached a record £1577—a figure 46 per cent higher than it was in early 2020.

Branches within the Property Franchise Group have sought to mitigate portfolio reduction by securing new landlords to purchase departing landlords’ properties, stemming a potentially more significant decline. The 1.5 per cent drop in the lettings portfolio is seen as manageable given the circumstances. Ben Dodds, the group’s chief financial officer, remarked that this modest decrease is a relatively positive result amid regulatory headwinds.

Looking ahead, increased regulation could benefit letting agents as more landlords seek professional management services to navigate the growing complexity. Gareth Samples expects the number of managed rental properties to recover over time, expressing confidence that their portfolio will trend back towards 155000 as legislation beds in.

The rental market faces ongoing challenges, with record high rents, new tax threats and persistent supply constraints set against the backdrop of the largest regulatory change in decades. The coming months are likely to prove pivotal for landlords, agents and tenants alike.