Is There A Shortage Of Rental Properties?

There are plenty of competing ideas about improving the private rental sector. But whatever your view, everyone seems to agree on one thing – rents are shockingly high. This is driven in part by the shortage of rental properties.

Data from the UK Government’s Office for National Statistics show rents rising 5.7% on average across the UK in the 12 months to August 2025. Average UK house prices increased by 2.8% in the 12 months to July 2025.

Whatever way you look at it, it’s not great news if you’re a renter. One factor behind it all is the simple law of supply and demand. If there are too few homes available compared with renters needing to rent, then inevitably rents go up. This is often due to a shortage of rental properties.

But there’s more to it than just not having enough homes. A big part of the problem is that there isn’t enough social housing. When there aren’t enough social homes, more people have to look for private rentals. This makes things even more competitive and pushes rents higher.

So, is there actually a shortage of rental properties, and if so, why? Let’s dive in.

Measuring the number of rental properties

There’s currently no national register of private rental properties. However, the Renters’ Rights Act will introduce a new Private Rented Sector Database in a later phase of the reforms. Until that is fully in place, there’s still no complete national measure.

But we do have evidence, from letting agents and industry organisations, indicating the ebb and flow of properties entering and exiting the private rental sector. Currently, there seems to be more exiting than entering. This contributes to the ongoing shortage of rental properties.

Recent industry-led research reported that landlords purchased 10% of the homes sold across Britain during the first half of 2024. This represents the lowest share of homes bought to rent for at least 15 years. It is significantly below the reported 16% peak in 2015.

The same report suggested that by the end of 2024, there will have been 40% fewer new, buy-to-let property purchases than in 2015. That’s a reduction of 75,900 private rental homes.

While some landlords have been buying, a larger number have been selling. This has been the case for every year since 2016. It calculates that as of today, private landlords will have sold 328,750 more rental homes than they’ve bought since 2016.

Population changes

The UK Government’s Office for National Statistics (ONS) reported that the UK population increased by approximately 2.5 million people between 2016 and late 2023.

Assuming even a small proportion want to rent privately, that’s a significant extra demand. This adds pressure to what would appear to be a diminishing private rental sector.

Why are landlords selling up?

There are several reasons for this, and each is controversial. In summary, both major political parties have voiced that they want to give more people the opportunity to own their own homes. There has been criticism over the years that many landlords were buying and subsequently renting properties that were ideal first-time buyers‘ first homes.

To curb this, the government increased the stamp duty charged on buy-to-let properties from 3% to 5%. This made it more expensive for private landlords.

They also reduced the tax relief for landlords with buy-to-let properties. This means they can now only claim at the 20% tax rate and nothing above that, as was the case.

All these changes have made it more expensive for landlords. While it might seem logical to cover these costs by raising rents, this isn’t always what happens. Not all landlords choose to increase rent; some may find other ways to manage their expenses.

However, for those where rising costs become unsustainable, selling their properties often becomes the only viable option. This reduces the number of available homes for rent. It further contributes to the supply issue and potentially drives rents up even further.

With the expectation that there’s more to come, through energy efficiency requirements to name but one. Many more landlords will simply call it a day.

As a result, there will be fewer private rental properties than there were, aggravating the shortage of rental properties.

What’s the solution?

There are no quick fixes, but there are longer-term measures in the pipeline.

Build to Rent (BTR) is a growing sector of PRS built specifically to rent, not sell. They are managed by institutional landlords e.g. pension funds, and banks.

BTR properties are modern and well-equipped, with most of them in urban areas. They’re often future-proofed with energy efficiency and other amenities. They allow tenants to keep pets and offer more flexibility for renters under the new periodic tenancy system in England (you can also upsize or downsize in the same development).

However, BTR homes are fewer. By Q1 2026, there were more than 147,000 completed BTR homes in the UK, with many more in planning and construction.

More generally, the current government has made it a central goal to build 1.5m new homes by mid-2029. It’s a highly ambitious target, not least because of the low house-building rates of recent years, the current lack of builders in the UK and the high cost of materials. They also rely on a handful of large private developers to build these homes. Their expertise and capacity are key to increasing housing availability and making a significant difference in the market. But if this figure gets near to being achieved, it will make a difference.

The government has flagged that it wants many of these new homes to be affordable to buy, and those for rent to be operated by housing associations and councils. If they are built, they will take some pressure off the private rental sector, which in recent years has had to house many who would previously have lived in social housing had it not been sold as part of the Right to Buy programme.

Working with a letting agent can help simplify the search for a rental home. Letting agents provide valuable expertise and access to a range of rental properties that meet your specific needs. With a professional agent, you can be confident that you’re in good hands throughout your rental journey.

Last Updated: June 17th, 2026