A major exodus of landlords from the private rental sector (PRS) may be on the horizon as the government prepares to introduce the Renters’ Rights Bill, industry experts warn. Propertymark, a leading trade body representing property professionals, has sounded the alarm, cautioning that the bill could worsen the housing crisis by further reducing the supply of rental properties and driving rents even higher.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, expressed concerns over the potential impact of the bill, which aims to improve tenant protections and standards. “While we support raising standards in the sector, the government must fully understand the consequences these changes will have,” Douglas wrote in a letter to the Financial Times.
Douglas cited Propertymark’s latest Housing Insight Report, which shows an average of eight registrations for each available rental property, a sign of the chronic shortage of homes for rent. With fewer new properties entering the market, he warned that the bill, in its current form, is likely to exacerbate the crisis. “More landlords are expected to withdraw homes from the PRS, many shifting to short-term lets instead,” he added.
Douglas’s concerns were echoed by Marc von Grundherr, Director at Benham and Reeves, one of London’s leading letting agencies. Von Grundherr described the bill as a potential “doomsday” scenario for the private rental market, predicting it would harm renters, landlords, and agents alike by reducing the number of rental homes and pushing rents even higher.
Beyond the regulatory changes, Douglas pointed to the existing tax burden on landlords as a significant factor behind their dwindling interest in the PRS. “Current tax policies, including higher stamp duty rates on buy-to-let properties and the removal of mortgage interest relief, are disincentivizing both new and existing landlords,” he noted.
He also highlighted the appeal of the short-term letting market, where landlords can command higher rents. “With the proposed two-month notice period offering little security, many landlords may find the flexibility and profitability of short-term lets more attractive,” Douglas concluded.
As the Renters’ Rights Bill moves closer to becoming law, stakeholders in the property sector are calling for the government to consider the broader implications for the housing market, warning that without careful adjustments, the bill could worsen an already challenging situation for renters.