Despite strong tenant demand across much of the UK, the private rented sector continues to face mounting pressure as more landlords exit the market than enter it, according to new research from the National Residential Landlords Association (NRLA).
A survey of NRLA members carried out by research firm Pegasus Insight found that 58% of landlords currently describe demand for rental properties as either “very strong” or “quite strong”. This demand is not evenly spread across the country, with particularly high levels reported in Wales and the North East, where around 74% of landlords said demand remains robust. In contrast, lower levels of demand were recorded in the South East and West Midlands, where just over half of landlords reported strong tenant interest.
The findings come at a time when wider housing pressures are also shaping the rental market. Research from the Resolution Foundation highlights that long waiting lists for social housing, combined with ongoing affordability challenges for first-time buyers, are expected to keep demand for rented homes elevated for the foreseeable future.
However, this sustained demand contrasts sharply with landlord activity in the market. The data shows that significantly more landlords are selling properties than purchasing them. Over the past year, around 21% of landlords reported selling at least one property, while only 7% said they had bought a new rental investment during the same period.
This imbalance is raising concerns about the long-term stability of rental supply. While demand remains strong, the shrinking number of landlords in the sector suggests that available rental homes may not be keeping pace with tenant needs.
Further pressure is expected as the Government prepares to increase income tax on rental income from next year. This move has sparked debate within the sector, particularly as housing ministers have previously acknowledged that earlier tax increases have contributed to landlords leaving the market.
Ben Beadle, Chief Executive of the NRLA, said that although some data suggests rental supply has increased in certain areas, it is still insufficient to meet ongoing demand from tenants across the country.
He emphasised that structural pressures in the housing system mean the private rented sector will continue to play a vital role. With long waits for social housing and the high cost of buying a home, many households will remain reliant on rented accommodation.
Beadle also warned that increasing taxation on rental income could have unintended consequences. In his view, further tax rises risk discouraging responsible landlords from remaining in the market or investing in new properties.
He argued that policy should focus on supporting landlords who provide good-quality homes, rather than adding further financial pressure. According to the NRLA, weakening landlord confidence could ultimately reduce supply, place upward pressure on rents, and make it even harder for tenants facing cost-of-living challenges to secure affordable housing.
Overall, the data paints a picture of a rental market where strong demand persists, but supply is increasingly under strain due to shifting landlord behaviour and ongoing policy changes.
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