The Renters' Rights Act, effective May 2026, is transforming the UK housing market with tighter regulations aimed at improving tenant security and raising standards. Since its introduction in September 2024, the Act has sparked debate over its potential to deter private landlords, reduce rental supply, and increase rents. However, a survey by Investec among UK property clients reveals that rather than a uniform retreat, the market is experiencing a strategic reshaping, with some operators stepping back and others leaning in.
Opportunities for Established Landlords
Mandeep Dhillon, Private Banker at Investec, notes that established landlords are poised to expand their portfolios. With falling rental stock, there is an opportunity for those who remain invested. The end of fixed-term contracts may seem to reduce income reliability, but tenancy lengths could increase as occupants seek long-term stability. Dhillon reports that property entrepreneurs are using buy-to-let mortgages to purchase additional units, supported by administrative help to handle increased regulation and risk spreading across multiple units.
Co-Living and Build-to-Rent Solutions
William Scoular, Head of Business Development, Real Estate at Investec, highlights that the decline of small-scale private landlords and the focus on high-quality accommodation favor large-scale developers. Institutional investors are maintaining their commitment to the build-to-rent sector. Co-living is emerging to suit transitory occupiers, while single-family housing offers longer-term family homes. Scoular emphasizes that rental returns must be carefully considered, as affordability pressures have constrained rental growth in London over the last two years.
Potential for Higher Rents and Consolidation
Liam Gribben, Executive Director, UK Advisory (Property Services) at Investec, observes that diversification remains a priority for property firms. Larger, better-capitalized firms can absorb compliance costs, while smaller operators may exit, driving consolidation in lettings. This could lead to a more professional sector, but rents may rise as costs are passed on. Industry feedback suggests the Act is not a major driver of corporate strategy but reinforces a trend toward offering ancillary services alongside lettings management.
This article is for general information purposes only and does not constitute financial or investment advice. The views expressed are not necessarily those of Investec. Eligibility criteria and terms and conditions apply. Your property may be repossessed if you do not keep up repayments on your mortgage.
