Research compiled by TwentyEA, part of the TwentyCi group, in its latest Property and Homemover Report found that in the last quarter of 2024, 12.2% of all new instructions were properties that had been rented in the last three years in the PRS. This equated to 39,684 homes.
Of those sold in Q4 last year, just 2.9% were re-let in the first quarter of 2025, suggesting that 3,634 properties were purchased by other landlords and brought back into the rental market.
Further, 15.6% of newly listed homes in Q1 were former rental homes, a higher share than the previous quarter and up on a share of 9.8% in Q1 2024. This totalled 70,542 formerly rented homes.
TwentyEA said with around 50-55% of new instructions going on to sell, this could mean around 18,000 rental homes have left or are leaving the market since Q4 2024, putting further pressure on supply.
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Fall in new rental homes to let
Alongside this, TwentyEA found there was a 1% decline in the supply of new ‘to let’ properties at the start of this year compared to 2024, and this was 22% lower than the pre-pandemic year of 2019.
The number of all ‘to let’ homes dropped to an all-time low at just 284,000 properties available. This was 18% down on Q1 2024 and 23% lower than the pre-pandemic period.
Nearly half – 46% – of available rental homes have a rent of more than £1,500 per month. Further, 15% are more than £3,000 per month. The average let agreed price is now £1,767 per month, according to TwentyEA, which it said would be unaffordable for most tenants.
Katy Billany, executive director of TwentyEA, said: “The rental market remains under significant strain, with tenants across the country facing a chronic shortage of homes.
“Our analysis reveals that a growing number of landlords are selling up to exit the sector and there’s a common misconception that other landlords will buy their properties and reintroduce them to the lettings market. By and large, though, this is not what we’re seeing.”
She added: “In Q4 2024, approximately 40,000 former rental properties were listed for sale, while only 3,600 were let in Q1 25, suggesting they had been purchased by other landlords. If 50-55% of the previous rental homes listed for sale go on to sell, it suggests that around 18,000 homes will exit the private rental sector or have already done so.
“The rental market is experiencing an accelerated adjustment phase as supply constraints intensify, and rental costs continue their upward trajectory ahead of the Renters’ Rights Bill implementation. Notably, market indicators have been signalling these shifts prior to the formal introduction of the legislation, reflecting broader underlying dynamics. The private rental sector demonstrates significant volatility, a condition that analysis suggests will persist throughout the near-term planning horizon.”
Housing market benefitting from rental sector pressure
TwentyEA said the owner-occupier market was becoming more attractive due to pressure on the rental sector.
It reported a 4% rise in the number of new instructions in Q1, while sales agreed rose by 9%. The report said the level of new listings was averaging around 425,000 homes per quarter, which was closer to volumes seen in a ‘normal’ market.
There was a 24% uplift in property exchanges but 24% of transactions fell through, which TwentyEA said was likely because of people abandoning sales because they could not complete before the stamp duty deadline.
Alex Bannister, independent economist at TwentyCi, said: “The preference to buy is likely to support the market, given how challenging it remains to rent. Even though rents are rising less quickly, they remain elevated by c.8% annual growth and conditions are set to remain tough.
“Scare stories around landlords exiting the sector may prove overblown, but TwentyCi data shows a marked increase in the proportion of newly listed properties [that] were formerly rented.”
The report suggested that this year’s homemovers were “more affluent, more mature and earn comparatively higher incomes”.
It found that pensions made up 25% of homemovers so far this year, compared to 17% last year, while movers aged over 45 but not yet pension age accounted for 42% of homemovers, up from 37% in 2024.
The report said people of all ages under 45 were less likely to move this year than in 2024.
Further, households with incomes of £50,000 or more made up 52% of people moving home, up from 46% last year. Meanwhile, the proportion of people with household incomes of £70,000 or more accounted for 31% of homemovers, compared to 26% at the start of 2024.
