Nearly 200,000 English households are expected to leave the PRS this year, according to new research from Pepper Money.
This equates to around 5% of England’s PRS rental stock.
In terms of regions, it is anticipated that the South East will lose the most households with 46,200 expected to exit.
London is the next market forecasted to suffer heavily, with 29,200 households expected to exit.
The Renters Rights Act has been identified as the main driver for these exits as it pushes up compliance costs for landlords.
Those owning a single property are twice as likely to exit the market compared to those holding two or more properties.
“While we welcome the additional protections for tenants introduced through the Renters’ Rights Act, and the continued focus on improving standards across the private rental sector, it’s important to recognise the potential unintended consequences for supply and pricing at a time when the sector is already under pressure,” said Paul Adams, sales director at Pepper Money.
“These legislative changes follow a series of fiscal and regulatory shifts that have cumulatively squeezed landlord returns and altered the economics of BTL investing.”
