The gap between supply and demand in the rental sector is set to increase by the end of 2024 with the ratio of tenants to properties going up from 2.2 per property to 2.21 last year according to Mistoria Group boss Mish Liyanage (pictured).

He says the issue is, despite surging tenant demand, 30% of landlords have sold or listed at least one rental property within the last year and a further 17.4% are contemplating similar moves in the coming months.

The number of renters relying on the private rental sector has surged by 132% over the last three decades.”

Mistoria’s data also shows half of all landlords have either already reduced their rental stock or plan to do so within the next year and over 56% point to upcoming legislation—particularly the abolition of Section 21—as their main concern.

Emphasising the severity of the situation, Liyanage comments: “The number of renters relying on the private rental sector has surged by 132% over the last three decades. While the tenant-to-property ratio has seen some improvement, more than two tenants are still vying for each available rental property.

Driving up competition

“Homes are being rented almost as soon as they’re listed, driving up competition and prices. Instead of incentivizing landlord investment, government measures appear to be pushing landlords away from the sector, exacerbating the supply crisis.”

He blames the Government’s adjustments to Capital Gains Tax and Stamp Duty, alongside new legislative efforts like the Renters’ Rights Bill, which have compounded the challenges facing landlords.

Despite these legislative hurdles, Liyanage believes buy-to-let investments continue to promise stable, long-term returns and have the added advantages of rental income and inflation protection.

And, he says, historically, real estate has been a reliable investment, yielding annual returns of 8% to 10%, depending on the location and market conditions.