Housing Squeeze: Landlords Exit UK Market, Rental Shortage Deepens

The UK housing market is currently facing a unique challenge: an increasing number of landlords are selling their properties, leading to a concerning shortage in rental homes.

Landlords Selling Up

Recent trends in the UK show a notable shift in the property market. According to a 2023 report, a quarter of landlords plan on selling an investment property in the next 12 months. This trend is driven by a variety of factors including rising mortgage costs, capital gains tax changes, and increased regulation. The volatile real estate market, alongside shifting tenant demographics, has contributed to this phenomenon, with 44.66% of landlords considering selling their investment properties​​​​​​​​.

Impact on the Rental Market

The repercussions of this trend are stark. The supply of rental homes in the UK has drastically fallen by one-third in the last year and a half, resulting in a surge in demand and an average rent increase of 11%. Letting agents have reported a significant reduction in the number of available rentals on their books. This imbalance between rental demand and market supply is expected to drive rents up by 4% in 2023, putting additional pressure on household finances​​​​​​​​.

The Way Forward

This situation presents a challenge for tenants seeking affordable housing options and underscores the need for a balanced approach in the property market. As landlords exit the market, there is a growing urgency to address the housing shortage and ensure that rental properties remain accessible and affordable for those in need.