Property sell-offs threaten to deepen the supply crisis
Private renters across England and Wales continue to face challenges as a lack of available rental homes persists, according to the National Residential Landlords Association (NRLA).
New research, conducted by Pegasus Insights for the NRLA, revealed that 77% of landlords reported strong tenant demand in the final quarter of 2024. Demand was particularly high in South West England, where 81% of landlords noted significant interest. The South East and North West followed closely, each with 80% of landlords reporting strong demand.
Despite the robust demand, supply is not keeping pace. Over the past year, 20% of landlords sold rental properties, nearly triple the 7% who purchased new ones. Looking ahead, 41% of landlords intend to reduce their rental portfolios in the next 12 months, with only 5% planning to expand them.
The NRLA highlighted concerns that this supply-demand imbalance would hit low-income renters the hardest, particularly as housing benefit rates are set to remain frozen from April 2025. Government data also shows that landlords selling properties remains the leading cause of tenancy terminations, accounting for nearly three times as many cases as the second most common reason.
In response, the NRLA is urging the government to implement measures aimed at restoring landlord confidence and stabilising the private rental sector. The association is calling for the removal of the stamp duty surcharge introduced in last year’s Budget, arguing that it discourages investment in rental properties. Paul Johnson, director of the Institute for Fiscal Studies, cautioned that the surcharge would “reduce the supply of rental housing and so increase rents.”
Additionally, the NRLA is pressing for improvements to court processes to ensure legitimate possession claims are handled more efficiently following the planned abolition of Section 21 repossessions under the forthcoming Renters’ Rights Bill. The group also supports The Law Society’s call for greater investment in the justice system to manage these cases.
The association is also calling for a reversal of the housing benefit freeze to better support low-income renters and ensure they can access suitable housing.
“Plans to improve security for tenants will mean nothing if the rental accommodation they need is not there in the first place,” said Ben Beadle (pictured), NRLA chief executive. “Tenants right across the country are feeling the effects of a lack of housing across the board, including with respect to the privately rented properties. Without change, the situation is only going to worsen. We need policies that genuinely support those who provide decent quality homes to rent.
“Tax hikes which penalise those wanting to provide such homes need to be scrapped. What’s more, those providing homes to rent must have the confidence to stay in the market when the Renters’ Rights Bill is passed. At present, that confidence simply is not there.”
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