A worrying 39% of landlords will probably exit the market within the next five years, according to the latest poll.
Research by mortgage specialist Pegasus Insight reveals a large cohort of disillusioned landlords who fear for the sector’s future amid growing legislative demands.
Its survey of 882 NRLA members also found that 37% plan to reduce the number of properties in their portfolio in the next 12 months - almost double the number who planned to sell in the first quarter of 2022, at 20%.
During the same timeframe, those planning to expand their lettings portfolio fell from 18% to 6%.
Pegasus Insight says recent sales activity is now running at almost four times the level of recent purchases.
A total of 22% have sold a property in the last year, while just 6% have bought one.
However, just 28% of properties sold by landlords remained in the PRS and while most investors buying a new property bought from another landlord (58%), those selling predominantly sold to owner occupiers (67%), especially first-time buyers (31%).
It found good tenant demand in most areas, high average rental yields and a steady profitability outlook. The average achieved rental yield remains high and largely unchanged at 6.3% - just 0.2% below the 10-year high recorded in the third quarter of 2024.
Pegasus Insight’s Mark Long says the fact many landlords feel compelled to sell up despite the underlying health of the market is particularly galling.
“There’s no doubt that the volume of stock in the PRS will reduce in the next 12 months,” Long added. “And as supply falls, while demand remains strong, rents will inevitably rise yet further, hurting tenants. The Government must wake up to the dangers of a shrinking PRS and change its approach to the landlords who provide homes for 19% of the UK’s population.”
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