The UK rental market is continuing to face a shortage of available homes as some landlords reduce their portfolios or leave the sector altogether.
The latest market snapshot from the Royal Institution of Chartered Surveyors (RICS) highlights ongoing concerns about the supply of good-quality rental properties, while taxation, regulation and affordability continue to influence decisions across the private rented sector.
Rental Demand Remains Weak
The RICS survey tracks sentiment among its members, with the latest figures showing that tenant demand was broadly unchanged in the three months to July.
The tenant demand net balance fell to -1%, compared with +12% in the previous survey. This points to a softer level of demand than seen earlier in the year.
The bigger concern, however, remains the limited supply of rental homes.
Landlord instructions remained firmly negative at -27%, with RICS members continuing to report that some landlords are cutting the size of their portfolios or exiting the rental market.
Landlord Numbers Continue to Affect Supply
The low level of new landlord instructions suggests that fewer properties are being added to the rental market. For tenants, a smaller choice of homes can make finding suitable accommodation more difficult.
RICS members have repeatedly raised concerns about the shortage of good-quality rental stock across the country. They also identify taxation, regulation and affordability as key factors affecting both landlords and tenants.
For landlords, higher costs and additional regulatory requirements can make some properties less attractive as long-term investments. This may encourage some owners to sell or reduce their portfolios instead of expanding.
Rents Expected to Keep Rising
Despite softer tenant demand, expectations for rental growth remain positive.
A net balance of +28% of RICS respondents expect rents to rise over the next three months, up from +25% in the previous survey.
The combination of restricted supply and expectations of higher rents highlights the pressure facing renters. With fewer homes available, asking rents can remain under upward pressure, particularly in areas where demand is stronger.
This can leave tenants facing a difficult market, with fewer suitable properties and continued pressure on rental costs.
Regulation Remains a Key Concern
Recent regulatory changes also remain a key concern among RICS members.
RICS Chief Economist Simon Rubinsohn said member feedback continues to highlight the effect of the latest regulatory changes, while falling new landlord instructions point to further pressure on supply.
The comments come as landlords face a changing regulatory environment and greater responsibilities under private rented sector reforms.
While stronger regulation aims to improve standards and give tenants greater security, landlords may also question whether the additional costs and obligations make property investment worthwhile.
What Could Happen Next?
The latest RICS figures suggest that rental supply remains one of the main challenges facing the UK housing market.
If landlord instructions remain weak, the shortage of available properties could continue. This may put further pressure on rents and make it harder for tenants to secure suitable homes.
Policymakers therefore face the challenge of balancing stronger tenant protections with the need to maintain a healthy supply of privately rented homes.
For landlords, the figures highlight the importance of considering costs, regulation and rental demand when deciding whether to hold, sell or expand a property portfolio.
The government says the Renters’ Rights Act strengthens protections against discrimination in the private rented sector.
Housing Minister Matthew Pennycook said the legislation targets both obvious and indirect discrimination during the lettings process.
New Protections
The Act makes it unlawful for landlords and letting agents to discriminate against prospective tenants because they receive benefits or have children. Breaches can result in fines of up to £7,000.
Labour MP Tanmanjeet Singh Dhesi asked whether landlords and letting agents should explain why applications are rejected, helping ensure compliance with the Equality Act 2010 and the Renters’ Rights Act.
Pennycook said the legislation extends existing Equality Act protections to people receiving benefits and families with children.
Local authorities will also have stronger powers to investigate and act against discriminatory practices.
The rules cover obvious practices such as “No DSS” adverts as well as less direct methods of preventing applicants from securing a tenancy.
Higher Standards for Landlords and Agents
The government also wants higher standards across the property sector. The Property Ombudsman already has a mandatory code for its letting agent members.
Later this year, a non-statutory code setting out minimum standards for property agents is due to be published, with legislation to make compliance compulsory also under consideration.
The planned Private Rented Sector Ombudsman will also be able to issue landlord guidance and codes of practice.
The government has previously suggested that the PRS Ombudsman could consider a landlord’s previous conduct when handling complaints.
What It Means for Landlords
Landlords and letting agents will need to take greater care when advertising properties, assessing applicants and making tenancy decisions.
Letting practices should be fair, consistent and compliant with the latest legislation, as discriminatory practices could lead to financial and reputational consequences.
The wider aim is to create a rental market where tenants are treated fairly and landlords and agents have clearer standards to follow.
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