PRS unpacked: The state of the private rented sector
The private rented sector (PRS) continues to face significant challenges and opportunities. In our latest State of the PRS infographic, we collate key data to reveal insights that every landlord should be aware of, whether you are managing a single property or expanding your portfolio. The data also gives an accurate snapshot of what the PRS looks like for landlords and tenants, key to supporting our ongoing campaigns work.
A Key Economic Contributor
Earlier this year and alongside Paragon Bank, we commissioned research into the economic contribution of small and medium landlords (those with fewer than 15 properties). The research highlights the vital contribution to the UK economy that these landlords make – an impressive £45 billion in Gross Value Added (GVA). This economic impact demonstrates the importance of landlords, not just in providing housing, but also in supporting broader economic growth, particularly through construction, maintenance, and management jobs.
A bright spot for tenant satisfaction
Despite various challenges, tenant satisfaction in the PRS is strong. According to the English Housing Survey, in 2022-23, 82% of PRS tenants reported being satisfied with their homes, a figure now eight percentage points higher than satisfaction among social housing tenants. This indicates that private landlords are meeting or exceeding tenant expectations, providing safe, comfortable, and well-maintained homes.
Balancing rising costs and tenant expectations
Inflation, rising interest rates, and other cost increases have affected households, including many landlords, in the past year. Our Landlord Confidence Index shows that, as a result, 69% of landlords increased rents between 2023 and 2024 to manage these rising expenses. However, it's notable that 31% of landlords chose to freeze or even reduce rents, highlighting that some continue to balance financial pressures with tenant affordability.
Uncertainty in the market
Our Landlord Confidence Index also suggests that the market remains cautious, with investment at an all-time low. Despite the proportion of landlords planning to sell declining since its peak in mid-2023, more landlords are still planning to exit the market than enter it.
Possession claims and legal timelines
Another critical issue in the PRS is the rise in possession claims, which increased by 9% from 2023 to 2024. The median time from claim to repossession has extended to 25.4 weeks, which is over three weeks longer than the previous year, highlighting the critical need for adequate resourcing of the courts ahead of rental reform.
Ground rent and service charges: Implications for leasehold reform
With the Government committed to implementing the Leasehold and Freehold Reform Act and publishing a Draft Leasehold and Commonhold Reform Bill, leasehold reform continues to be a subject of debate. Findings from our quarter two survey reveal that, while most leaseholders pay £100 or less in ground rent annually, 32% face service charges exceeding £250, with over 6% paying more than £3,000 annually.
Navigating the PRS
The PRS remains a vital part of the UK housing landscape, contributing significantly to the economy and providing homes for millions of households. However, with rising costs, regulatory changes, and uncertainty in the market, landlords must stay informed and adaptable. Take a look at our State of the PRS infographic below for further insights.
Infographic: State of the PRS Summer 2024
