Our most recent Property Watch survey made it clear how  difficult operating circumstances continue to stress existing landlords. A staggering 45% of London-based surveyors report an increase in the number of homes being rented over the initial asking rate as the supply/demand imbalance in the private rented sector continues to drive up rental values.

As landlord pressure grows, more privately rented houses are entering the market, according to half of the surveyors we contacted. Some 90%  of surveyors found that the rented residences that were placed up for sale were often going to buyers who intended to use them as their primary residence, thus decreasing the local rental supply.

Compared to other buyer groups, the participation of landlords in the sales market has decreased. A reduction in landlords seeking to purchase new investment homes was reported by about 79% of surveyors, and the trend was largely consistent across all regions.

Our research  conclusively shows that the rental market will continue to shrink as financial pressures continue to grow. Rent arrears are already occurring as a result of tenants’ worsening affordability.

Some landlords are unable to justify their continued involvement in the industry financially due to the substantially greater costs associated with buy-to-let remortgages. Between Q1 and Q2 of this year, buy-to-let mortgage arrears of 2.5% or more increased by 28%, according to data from UK Finance.

Over the same time period, lighter arrears increased at a higher rate, growing 41%, making up more than half of the sector’s total arrears.

The postponement of the present 2028 target for bringing privately rented homes up to a minimum EPC band C was promoted as a reprieve for renters and landlords, with the hopeful supposition that landlords would pass on to tenants the anticipated £10,000 cost of renovations.

In reality, abandoning the programme is more likely to increase renters’ energy costs while doing little to slow the rate of rent increases. In any case, the majority of landlords have either already started or are in the process of upgrading their properties’ insulation, triple-pane windows and gas boiler options.

Rents are rising at such a rapid rate due to the expense of mortgage servicing, which is causing many people to list their homes for sale. Higher rents are even more likely given that our analysis shows that the vast majority of those homes are not being recycled back into the private leased market.

The largest problem in the rental market right now is dwindling supply, which is made worse by the upcoming Renters Reform Bill, which would do away with Section 21 no-fault evictions and deter more landlords from entering or growing the market and there is alarming evidence that the anticipation of the Bill has caused a wave of landlords to sell their properties.

According to housing charity Shelter’s most recent tally , 540 residents receive a Section 21 notice per day. The industry is already facing difficulties. Right now, it appears as though such pressures will increase.

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James Ginley, Director of Technical Surveying, e.surv