The ratio of private tenants to available rental properties is projected to rise to 2.21 by the end of 2024, up from 2.2 in 2023, indicating a tightening rental market with more competition for limited housing.
New data shows that more than half (56%) of landlords looking to downsize or leave the sector are motivated by incoming legislation, which could further reduce rental property availability.
50% of landlords had either sold part of their private rental sector portfolio or planned to do so within the next 12 months, marking a significant shift in the rental landscape.
Despite strong tenant demand, 30% of landlords sold or listed at least one rental property in the past year, with 17.4% considering similar actions soon.
Insights from more than 1,500 landlords, tenants and letting agents indicate that the supply crunch is pushing rental prices to unsustainable levels, with nearly half of tenants reporting they are in ‘rent poverty’.
Mish Liyanage, CEO of The Mistoria Group, said: “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.
“Homes are being rented almost as soon as they’re listed, driving up competition and prices.
“Instead of incentivising landlord investment, Government measures appear to be pushing landlords away from the sector, exacerbating the supply crisis.”
Changes to Capital Gains Tax and Stamp Duty, along with new legislation like the Renters’ Rights Bill, are compounding the challenges for landlords and are expected to further reduce rental stock, leading to higher rents and limited options for tenants.
Despite these challenges, buy-to-let investments continue to offer stable, long-term returns, with annual returns historically ranging from 8% to 10%.
Liyanage added: “Over the past decade, property prices in key cities have risen considerably, cementing real estate as a viable option for capital appreciation.”
“With a history of successfully acquiring multi-million-pound property portfolios in the North West, including recent purchases in Wirral, Bolton, and Chorlton, The Mistoria Group exemplifies expertise in navigating complex investment landscapes.
“With over 200 years of combined experience, the team consists of chartered management accountants and a wide range of property professionals committed to offering tailored investment guidance.”
