The ongoing shortage of rental supply across London presents renewed opportunities for investors.
That’s the upbeat message from Jeremy Leaf, the high profile former residential chairman of the Royal Institution of Chartered Surveyors.
He says: “Conditions for letting property are favourable at present given the level of stock being sold and demand remaining strong in most areas, so many longer-term landlords are taking advantage.”
Leaf, who runs his own agency in north London, acknowledges some of this opportunity has been created by landlords quitting buy to let because of higher taxes and more regulatory red tape.
“Many are leaving the sector [because of] the looming Renters’ Rights Act which is due to become law on 1 May.
“Landlords will then find regaining possession is likely to prove more difficult – they will have to wait over a year if they want to re-let to prevent back-door evictions, they won’t be able to increase the rent more than once a year and then subject to review, as well as stricter penalties, to name but a few changes.
“As a result, an increasing proportion of landlords are not renewing agreements and trying to sell despite the attraction of higher rents and yields.
“We’re finding many of those staying put are increasing rents to market levels while they can but ensuring references, guarantees and insurance are up to speed as well as instructing qualified agents to reduce the risk of problems arising.
“Even those with tenants who have proved reliable in the past appreciate circumstances change and nothing stays the same.”
Leaf’s comments follow news that the UK’s private rented sector has experienced its largest decline this century, according to Savills.
Its value collapsed by £48 billion in 2025 alone.
Savills’ analysis reveals that the PRS is the only housing sector to have contracted over the past three years.
It decreased by 5.1%, despite the UK housing sector growing by 3.8% overall.
The PRS has now contracted for three years in a row, says Savills, meaning that the value of homes has fallen by a total of £79 billion since 2022, as increased house prices have failed to offset the loss of stock.
Value of UK housing by Tenure
| £bn | 2025 | 2022 | Change | % change |
| Mortgage-free owner occupied | 3,455 | 3,316 | +139 | +4.2% |
| Owner occupied subject to a mortgage | 3,132 | 2,935 | +197 | +6.7% |
| PRS | 1,477 | 1,556 | -79 | -5.1% |
| Other | 672 | 635 | +37 | +5.8% |
| Privately Owned UK Housing | 8,735 | 8,441 | 293 | +3.5% |
| Social | 443 | 400 | +43 | +10.6% |
| All UK Housing | 9,177 | 8,842 | +336 | +3.8% |
Instead, growth has been driven by owner-occupied housing.
Over the past three years, the value of mortgaged owner-occupied homes has risen by £197 billion – outpacing the £139 billion increase in the value of mortgage-free owner-occupied properties.
“Over the past 25 years, we’ve grown accustomed to a story of the private rented sector expanding at the expense of people’s ability to get onto the housing ladder” comments Lucian Cook, head of residential research at Savills.
He continues: “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.”
