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14/7/25 8:13 pm
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Scenes of sometimes desperate tenants trying to bag a property during viewings as witnessed by many landlords since the pandemic are to come to an end, a leading lettings agency has predicted.
Savills reckons the recent volatile private rental market will stabilise over the next few years, although it warns that any disruption caused by the Renters’ Rights Act may turn up the heat again as more landlords exit and supply dwindles.
“The private rented sector has been uncharacteristically turbulent over the past few years,” says Emily Williams, director of research at Savills (main image).
Her research scotches recent claims by Rightmove that tenants are spending half their income on rent, instead highlighting how the ratio has increased from 30.4% in 2020 to 32.4% this year.
"Largest worsening in rental affordability since at least 2006"
Nevertheless, Williams says this is the largest worsening in rental affordability since at least 2006, and probably since the early 1990s.
“But as demand levels start to settle, our forecast indicates that conditions over the next five years are expected to return to more normal levels, with rents increasing at a rate between inflation and income growth,” she says.
The private rental market has faced supply challenges over the past decade and Savills says landlord instructions to let homes have been declining since 2017, due to a combination of tax reforms, rising interest rates and anticipated regulatory changes, which have made buy-to-let investment less attractive, prompting some landlords to exit the market.
At the same time, the scale of Build to Rent remains insufficient to fill the gap, averaging just 15,000 completions annually against a backdrop of 4.9 million households in the private rented sector.
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