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14/7/25 8:13 pm
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The UK’s private rental sector is undergoing one of the most dramatic shifts in decades and not for the better.
For years, small landlords have been the backbone of the rental market. They’re the ones who rented out family homes, maintained long-term relationships with tenants, and provided flexible housing at fair prices.
The recent suggestion of National Insurance charges on rental income is not just another hurdle; it’s the breaking point.
Lenders are reporting a surge in landlords moving into limited company structures and portfolio lending.
This tells us something crucial: the “accidental landlord” with one or two properties is being forced out, while the sector consolidates into the hands of professional operators.
Smaller landlords traditionally offered more affordable rents, more flexible arrangements, and often higher quality maintenance. When they disappear, tenants lose those safeguards.
The consequences are stark. Higher rents as fewer landlords mean reduced supply at a time of record demand. Lower housing quality as larger portfolio or corporate landlords operate at scale, where cost-cutting can come ahead of individual care.
Less tenant choice moving towards a “take it or leave it” model of corporate build-to-rent, with premium pricing and far less personal flexibility. This is seen in larger cities, Manchester and Liverpool, being clear examples.
More lending risk, as the market shifts towards complex, leveraged portfolio structures rather than a broad mix of landlords.
The Renters’ Rights Bill was designed to protect tenants, but the irony is clear: every new regulation and tax burden drives more small landlords out, leaving tenants with fewer options, higher costs, and poorer housing.
This is no longer just a landlord issue. Mortgage lenders will adapt, but the nation’s housing market will be poorer, less balanced, and more fragile as a result. Landlords are under siege, tenants are collateral damage, and the rental market we’ve known for decades is on the brink of collapse.”
Daniel Bell is a Director and Mortgage Adviser at Bell Financial Solutions.
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