Rental Market Update: Stability Despite Challenges

You could be forgiven if you, like many others, wonder if there is an impending private rented sector collapse coming over the hill…. 

But rest assured, by the end of this article I hope you will feel at least a little more at ease… especially if you are a landlord with a buy to let property or property portfolio.

At Bartlett and Partners, we specialise in the sale of select properties in Richmond, Twickenham and Teddington. We are not a Lettings Agency and we are not involved in Property Management. 

Nevertheless, many of our clients have lettings interests, or concerns about their nearest and dearest – most often their children – finding housing in this part of London. One way or another the lettings market is often a topic of conversation – so it made sense to us to offer our perspective and, we hope, to bring you a bit of balance to what can often feel like a sensationalised subject.

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Challenges Facing Richmond Borough Tenants and Landlords in 2025

Tenants are beset by high rents and a low availability of rentable property (these two things are not mutually exclusive, needless to say… the latter leads to the former). Landlords face the burden of higher taxation and vanishing tax relief, and whilst they were spared an increase in capital gains tax in the most recent Budget announcement, hopeful new landlords – and indeed, experienced landlords wishing to grow portfolios – have seen an increase on the already burdensome 3% extra stamp duty levied on ‘second properties’, which has gone up to 5% - quite a chunk. 

Still – whilst some landlords have decided ‘enough is enough’, there is still reason to feel cheerful – which is exactly why the majority of landlords are holding tight, improving their properties where needed, and in plenty of cases are even growing their portfolios. 

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Safe as Houses?

The reason for this, despite any uncertainty you might be entertaining, is that the Great British public still believes there is no safer investment than bricks and mortar. In fact, believe it or not, last year around £1 in every £14 of money lent was for Buy to Let purchases. That is Buy to Let specifically, not just property purchases in general.

You might be thinking that this doesn’t tally up with the narrative you have been reading about or hearing in the news – and again, you’d be forgiven…

In April last year, for example, a poll reported in Letting Agent Today, and then parroted by other media outlets, suggested that up to almost one-third of landlords planned to sell their let-property portfolios in 2024. Quite astonishing!

Now, estimates are that around 168,000 buy to let properties were sold last year. But, figures also indicate that there were around 113,000 new buy to let purchases in the same period.

Admittedly, that is a net fall of some 55,000 private rental sector properties across the nation – but let us just take a breath here. 

There were around 4.6 million private rented sector properties in the UK at the beginning of last year. Even the 168,000 buy-to-let sales since then does not come anywhere close to being 33% of the market. Truth be told, it is only a little more than 3%. 

And when you look at that net loss of 55,000 homes, the number is only around 1.2%.

A 1.2% reduction in private rented sector stock does not represent a mass exodus of landlords and certainly not a collapse of the market.

So yes - some landlords clearly are choosing to sell their rented properties; but then again, that is the case every year. Perhaps there are a few more than normal, and obviously we are looking at a net loss, not a net gain, of private rented sector properties – but nothing disastrous enough to shift the dial so dramatically as to herald any sort of death knell when it comes to the lettings market in Richmond, or anywhere else. 

On the other hand, clearly it doesn’t help. Perhaps it is leading to an increase in rents, as the number of available rental properties reduces (slightly). I am sure it contributes; however, the reality is that rising rents is a matter of economics.

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The truth about rising rents in Richmond

Rather than the shortened supply alone, heightened rents are driven by market forces, Greater competition for rental properties is one factor, but also consider increased costs to landlords – not least monthly mortgage costs, increased maintenance costs (for example, as contractor’s fees increase), increased tax, now that relief has disappeared on the interest amount of a buy to let mortgage... and the list goes on. 

The result of rising costs has been the widescale increase in rents being charged, in order to cover these things. Rising rents themselves are not the sign of a lettings market fire-sale. The so-called and widely purported ‘landlord exodus’, is a red herring.

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What is the outlook for Richmond Tenants?

Is this bad news for tenants?

No – and not that this means we want to see tenants overpaying rent. That is not the case. And, of course, the Renters Rights Bill, soon to be passed into law (and more detail on that to follow in a future article), will lay out measures that support tenants and that will protect them from unfair rents.

Truly bad news for tenants would be that the rental market were collapsing, because a third of the homes they lived in were being sold. That truly would skyrocket rents, not to mention lead to something amounting to the unravelling of society as we know it – something which the government (any government) would do well to heed and prevent... and of course, when we stand back and think about it, they would do. 

Any government, by way of thinktanks and data providers and probably quangos, has already taken into account landlord attrition whenever it announces housing and tax policies. 

We don’t like to admit it, Landlords might not love it, and our industry colleagues working in Lettings and Property Management might well pull their hair out in lumps… but the size of private rental sector decline has of course already been factored in and budgeted for when the Chancellor sets the Budget, and when the government pushes through the sort of new sweeping Act of Parliament that we do know is coming down the line.

Sensational news stories make for a more scintillating read, but when we think about it, and especially when we consider those figures mentioned earlier in this article, we know it makes sense. The market, as it turns out, is stable.

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Advice for Richmond Landlords Amid Rental Market Changes

The reality, then? We are in a relatively brief period of transition, and perhaps we are seeing a degree of a ‘changing of the guard’ with some older landlords in particular selling up, even as a new breed of landlord comes into the market. 

At the same time, planning reforms will gradually see rental market stock pick up, the build-to-rent sector in particular grow, and – over the course of this year – mortgage rates begin to drop, easing the pressure on landlords (and in doing so, removing the risk of more of them selling up).

Will the forthcoming Renters Rights Bill affect this?

To some extent, perhaps, and it is no doubt going to be a talking point this year, but most landlords we are talking to are inclined to take a ‘wait and see’ approach.

And that seems more than sensible.

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