Letting agents report significant exit of landlords from market
Latest RICS report contains scores of agents saying renting reforms are persuading more landlords to quit the PRS.
Letting agents have reported landlords quitting in significant numbers ahead of the Renters’ Rights Act.
Their comments are within the June 2025 RICS UK Residential Survey which reports landlord instructions falling, registering a net balance reading of -21%, as offices around the country report concerns about supply in the private rental sector.
In Barnsley, Adam Parkinson at Countrywide Surveyors says several long-standing landlords have recently sold up, citing concerns with the legislation – particularly that they will struggle to evict unruly or unreliable tenants.
Stan Shaw, at Mervyn Smith & Co in Ham, says the market remains inflated and competitive, but due to lack of supply rather than intrinsic strong demand. “The pattern of landlords exiting the market continues with very few new investor buyers,” he adds.
“Landlords still remain cautious regarding the reforms, and we are seeing high levels of landlords exiting the market at the end of tenancy,” reports David Boyden, at Colchester-based Boydens.
Possession grounds
William Delaney, at Coopers of London, agrees, adding that changes to possession grounds are another concern for his clients after the government refused to publish a justice impact test around the Renters’ Rights Bill.
He believes the county court system can currently barely cope, and adds: “When the bill becomes law, a likely consequence will be a breakdown of the court system.”
RICS reports that tenant demand was largely steady in June, posting a net balance of -2% (part of the non-seasonally adjusted monthly rental market dataset) while a net balance of +24% of agents expect rents to increase in the next three months compared to +43% last month.
To avoid the housing market for tenants sliding from bad to disastrous, the government will have to offset the damage from their Renters Rights Bill with the repeal of Osborne’s discriminatory tax on landlords. Section 24 means landlords can pay 75% tax or more on rental income. That drives rents up as the marginal rent from any rent rise is taxed only at the normal rate. Landlords are compelled to raise rents to the maximum to get more fairly-taxed rent to offset the base rent confiscated by the State. The effect of Osborne’s highly regressive tax is worst where housing is most needed, prices high and interest a heavy cost on landlords, for example London.
It should be a no-brainer for Labour to win some business credibility by scrapping a Terrible Tory Tax. They have had to U-turn on a few of their own policies recently, so would it not be a welcome change to repeal a Tory policy? We will see if their tribal hatred for landlords is even stronger than their care for the plight of tenants and their government responsibility to just back off and let those of us who work in this massive sector of the economy, housing, to get on with delivering a working housing market without having to contend with ideological destruction.