The government can’t afford to ignore the BTL market – Hall

In January 2025, landlords accounted for a record low of 9.6% for home purchases, with London seeing an even sharper decline at just 7%. This drop corresponds with Labour’s proposed Renters’ Rights Bill, which would ban no-fault evictions and impose tighter rent controls.

Although intended to protect tenants, the measures risk potentially pushing even more landlords out of the market, posing serious repercussions for the sector. 

The decline in buy-to-let (BTL) investment is exacerbating an existing shortage of rental properties, with 39% fewer homes available than in 2019 and nearly 50% fewer in London. This shrinking supply is stoking rent inflation, with rents on newly let homes rising by a third over the past five years, with private rents rising 8.7% in the 12 months to January 2025. 

If landlords continue withdrawing from the market at the current rate, the situation will only worsen. Reduced supply will push rents even higher, making it harder for tenants to find affordable housing and increasing pressure on the wider housing system.

The Renters’ Rights Bill, combined with rising costs and increasing regulatory demands, risks accelerating this trend. 

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Balancing tenant protections with landlord incentives 

While tenant protection is essential, the government must also recognise the need for policies that support landlords and prevent them from leaving the market. As costs rise and regulation tightens, many are reconsidering their positions. 

A vital role in the housing market 

The BTL sector remains a cornerstone of the UK’s housing strategy, meeting the needs of millions. While the government has proposed new legislation to deliver one-and-a-half million homes, relying solely on new builds to meet this demand would be unrealistic. Other avenues, such as the renovation of brownfield urban sites, could play a key role in stimulating both the first-time buyer and BTL markets while maximising infrastructure.

Private landlords are a key part of the solution, bridging the gap between supply and demand by offering a wide range of rental options. 

Policy changes also have the potential to strengthen the sector. As Energy Performance Certificate regulation becomes clearer, particularly the new requirement for a minimum C rating, landlords will need to comply. While incentives for energy-efficient upgrades could improve housing quality, they will not resolve the issue entirely. A large proportion of rental housing stock simply cannot be renovated to meet this standard due to the structural limitations and high costs associated with upgrading some older properties. A more efficient approach is needed that recognises the limitations of existing properties. 

Securing the future of the rental market 

The BTL market is crucial to the UK’s housing market and therefore should be the focus of the government’s housing strategy. While tenant protection is vital, it must also be paired with support for landlords and rental supply.

By striking the right balance, policymakers can help to build a more secure and affordable rental sector that meets the needs of current and future generations.