A recent survey by PayProp, an automated rental payment and client accounting platform, reveals that 50% of tenants were forced to vacate their properties last year because landlords opted to sell. This primary reason for tenant moves outstrips other causes significantly, with eviction cited by only 11.3% of respondents in the Rental Confidence Index report.
Neil Cobbold, managing director of PayProp UK, highlighted the impact of these sales on the Private Rented Sector (PRS). “The majority of homes sold by landlords are purchased by first-time buyers, removing these properties permanently from the rental market,” he explained. This trend not only diminishes the housing stock available for rent but also intensifies competition among tenants, potentially driving up rental prices.
Cobbold pointed to several factors contributing to landlords’ decision to sell, including the aging demographic of landlords, the current economic landscape affecting profitability, and mounting regulatory pressures. “If this trend towards fewer PRS properties is going to be reversed, the Government has to find a way to keep landlords in the PRS and encourage more investors to join the sector,” he added.
The findings come at a time when the Government’s Renters (Reform) Bill, which aims to implement significant changes in the PRS, has passed its Third Commons Reading and progressed to the House of Lords. Among the proposed changes are the removal of Section 21 evictions, the conversion of most tenancies to periodic tenancies, and enhanced tenant rights, including the ability to appeal rent increases and the legal right to keep pets.
The survey also reflects a shift in industry sentiment, with a decrease in very negative views and an increase in neutrality or optimism about the future of the PRS. Despite this, fewer industry professionals see themselves working in the sector in five years.
