16 Comment
“These reforms represent the most signifi cant overhaul of the PRS in decades” Mark Foxcroft
requirements. Maintaining profi tability over the years has become increasingly diffi cult due to new tax laws, increased legal obligations and compliance, and increasing costs; this is set to continue with new requirements surrounding damp and mould, fi re risk, and electrical and gas safety. T e trickle of smaller landlords leaving the market is already approaching a stampede, with fi nancial advisors all too happy to point towards other wealth management products. By contrast, larger landlords and institutional investors will fi nd themselves
better equipped to adapt. With dedicated property management teams and access to economies of scale, they can navigate these regulatory changes more eff ectively. T is dynamic is driving a shiſt in ownership structures, with many landlords now operating through limited companies, a trend that has grown from 36% to 66% over the last fi ve years. T e likely result is a consolidation of the market, where large, professional
landlords dominate, and smaller, individual landlords either exit or partner with management agencies. T is shiſt is already visible in the Build to Rent (BTR) sector. BTR developments are purpose built rental properties, oſt en managed
by institutional investors. T ey off er high quality housing, professional management, and amenities that appeal to modern tenants. According to Savills, the UK’s BTR stock reached 127,000 homes in Q1 2025 (up by 16% compared with Q1 2024), with 50,000 more under construction and 110,000 in planning.
While BTR currently represents just 2% of the UK PRS, its footprint is
growing, especially in urban centres like Manchester, where it accounts for nearly 25% of rental stock and there is signifi cant room for expansion. Labour’s target of 300,000 new homes annually by the late 2020s hinges on
a mixed tenure approach, with BTR playing a central role. However, challenges remain, including building safety delays and planning bottlenecks, which threaten housing delivery targets.
A WORSENING HOUSING CRISIS While professionalisation rightly aims to improve housing standards and tenant protection, it may inadvertently exacerbate the housing crisis. As smaller landlords exit and regulatory burdens increase, rental stock may decline, particularly in the short term. T is is confi rmed by RICS, which sees “landlords continue to leave the sector” as the number of rental properties coming to market fell sharply for the 11th straight month in June 2025. Meanwhile, BTR developments take time to build, creating a mismatch between supply and demand. T e Zoopla Market Report (June 2025) notes a 21% rent increase over
three years, with rents rising 2.8% over the 12 months to April 2025. Crucially, demand remains 60% above pre pandemic levels, underscoring the urgency of increasing supply. Without rent controls, rising rents could undermine the Renters’ Rights Bill’s
ambitions. T e Government must balance regulations with support for housing delivery to avoid deepening aff ordability issues.
A SECTOR REIMAGINED It is crucial to prepare for the evolution of the PRS. It will be vital to understand the multitude of legislative reforms, review and upgrade property standards, and strengthen documentation and processes. For PRS landlords of all sizes, conversations are needed to consider professional management, reassess fi nancial and ownership structures, and prepare for market consolidation.
Mark Foxcroſt is a partner at Devonshires Housing Management & Maintenance October/November 2025
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