The UK’s PRS shrank by £48bn in value last year, the largest decline this century according to Savills.
At the same time, the value of owner-occupied housing stock rose by over £185bn as the number of mortgage-free owners rose.
Savills research shows the PRS is the only housing sector to have contracted over the past three years, decreasing in value by 5.1%.
This is despite the UK housing sector growing by 3.8%, or £336bn, overall.
With the PRS contracting in three consecutive years, this has seen the total value of the sector decline by £79bn since 2022.
“Over the past 25 years, we’ve grown accustomed to a story of the PRS expanding at the expense of people’s ability to get onto the housing ladder,” said Lucian Cook, head of residential research at Savills.
“But while deep-seated housing challenges remain, lighter regulation in the mortgage market and tighter oversight of the private rented sector are gradually beginning to shift that narrative.
“Changes in tenancy legislation, higher operating costs and increased mortgage rates have prompted many private landlords to reassess their portfolios.
“Larger landlords, better equipped to absorb added costs and requirements, have taken on some of this stock, contributing to a more professionalised PRS.
“But others have been sold to owner-occupiers, reducing the sector’s overall size.”
