Housing Hand has said 2026 will bring a number of challenges for those investing in the private rental sector.
Three subsectors are expected to face particular challenges: purpose-built student accommodation (PBSA), build to rent (BTR) and houses in multiple occupation (HMOs), according to Housing Hand.
Jeremy Robinson, group founder and CEO at Housing Hand, said: “From an investment perspective, certainty is good, so the fact that the Renters’ Rights Act has received royal assent is a positive step forward.
“However, major regulatory change of this nature demands careful consideration if investors are to navigate it successfully.
“Add to that the market and pricing shifts we’ve observed over the past year, and the stage is set for a testing 2026.”
Research found PBSA investors are unsettled after occupancy dropped this year.
Student demand fell by 1% to 2%, but PBSA demand dropped by 7% to 8%.
Robinson said PBSA prices may have peaked in cities like Leeds and Durham, so investors need to consider what they are building and where. Cities such as Birmingham and London are still doing well, and there is still potential for affordable schemes in other locations.
Housing Hand expects a year of consolidations, with larger HMO owners buying up smaller ones and more institutional investors entering the market, which could push rents up.
Housing Hand is offering products to help investors manage risk, including three guarantor products and its A-Void™ service for HMO landlords serving Ground 4A notices.
Housing Hand is also supporting renters who use its guarantor service with a free digital health and wellbeing service.
Robinson added: “PBSA, BTR and HMO investors are all facing a tough year ahead, as are university halls.
“Each market segment has a different risk profile, so requires a different type of support.
“Having worked across the breadth of the rented sector for well over a decade, Housing Hand is uniquely positioned to understand those needs and provided tailored support, helping investors navigate market changes with greater confidence and less risk.”
