The PRS has seen its largest decline in value this century, according to property firm Savills, falling by £48 billion in 2025.

Its analysis reveals that the PRS is the only housing sector to have contracted during the past three years (-5%), despite the UK housing sector growing by 3% overall (+£336 billion).

The PRS has contracted for three years in a row, says Savills, meaning that the value of homes has fallen by £79 billion since 2022, as increased house prices have failed to offset the loss of stock. Instead, growth has been driven by the value of mortgaged owner-occupied homes which has risen by £197 billion.

“Over the past 25 years, we’ve grown accustomed to a story of the private rented sector expanding at the expense of people’s ability to get onto the housing ladder,” says Lucian Cook, head of residential research. “But while deep-seated housing challenges remain, lighter regulation in the mortgage market and tighter oversight of the private rented sector are gradually beginning to shift that narrative.”

Changes

Cook explains that changes in tenancy legislation, higher operating costs and increased mortgage rates have prompted many private landlords to reassess their portfolios. “Larger landlords, better equipped to absorb added costs and requirements, have taken on some of this stock, contributing to a more professionalised PRS. But others have been sold to owner-occupiers, reducing the sector’s overall size.

“With more former PRS stock available to buy, first-time buyer activity has been relatively strong in the context of post credit crunch levels. This has been supported by the less stringent application of mortgage regulations, falling mortgage rates and rising wages.”

NRLA

A spokesperson for the NRLA tells LandlordZONE: “The blunt truth is that there are not enough homes to rent to meet demand, with London seeing the steepest drop in supply as it becomes increasingly difficult to make a return. Savills’ figures should be a wakeup call for the need for pro-growth policies that support investment in the new, good quality homes to rent tenants desperately need.”

Southampton Council is the latest authority to recognise a fall in landlord numbers, reports the Daily Echo. Councillors had their suspicions confirmed by Maria Byrne, head of housing need and support, who told a recent meeting: “I think we are starting to see an increase in landlords exiting the market, whether that is single landlords potentially with one property maybe thinking this is complex and maybe don’t want to be in it anymore.”

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