Writing in the Big Issue, Greg Barradale warns that the potential exodus of landlords from the private rented sector (PRS) due to Labour’s proposed reforms is sparking intense debate about the future of housing in the UK. With nearly a third of landlords planning to sell, this shift could drastically reshape the housing market. Here’s a breakdown of what’s at stake and possible paths forward:

The Immediate Impact of Landlord Exodus

  1. Reduced Housing Supply in the PRS
    • Government data shows 31% of landlords plan to reduce their portfolios, while 16% aim to exit the market entirely.
    • With demand for rentals already outstripping supply, rents—already ÂŁ3,240 higher annually compared to pre-pandemic levels—are expected to rise by another 4% in 2025.
  2. Homelessness Risk
    • A mass sell-off of rental properties risks exacerbating homelessness as fewer rental homes are available, particularly for low-income tenants reliant on benefits.
  3. Who Fills the Gap?
    • If landlords sell, homes won’t “evaporate,” as the New Economics Foundation (NEF) points out, but who takes over ownership is critical—local authorities, large corporate landlords, or community-led initiatives?

The Case for Local Authorities

  1. Rebuilding Council Housing
    • Advocates like Abi O’Connor suggest this is a once-in-a-generation opportunity for councils to reacquire properties lost under Thatcher’s Right to Buy scheme.
    • London’s Council Homes Acquisition Programme, led by Sadiq Khan, aims to purchase 10,000 homes for council housing—a model other regions could replicate.
  2. Barriers to Action
    • Funding remains a significant hurdle. Current rules limit how much councils can reinvest from property sales into new housing.
    • Relaxing these rules and increasing acquisition-focused grants could enable councils to act more decisively.

Corporate Landlords and the Risk of Monopoly

  1. Institutional Takeover
    • With small landlords selling up, large corporate landlords could dominate the PRS.
    • Critics warn this could reduce flexibility for tenants and lead to stricter tenant selection criteria, especially disadvantaging low-income or benefit-dependent renters.
  2. Long-Term Implications
    • A consolidated rental market may exacerbate affordability issues, as large landlords prioritise profits over tenant welfare.

Community-Led Solutions

  1. Community Right to Buy
    • This initiative allows communities to band together to purchase properties, improving housing standards and empowering residents.
    • However, its scalability is limited by the significant financial and logistical resources required.
  2. Success Stories
    • Groups like Giroscope in Hull have successfully acquired and renovated properties for affordable renting. Scaling such models would require renewed funding programmes like the Empty Homes Grant Programme.

Policy Suggestions

  1. Encouraging Landlord Retention
    • Simplify regulations and provide tax incentives to make remaining in the PRS more viable for small landlords.
    • Offer financial assistance or grants for energy efficiency upgrades to meet new EPC requirements.
  2. Empowering Local Authorities and Communities
    • Relax rules on reinvestment of council property sale proceeds to enable more acquisitions.
    • Provide sustained grant funding for community housing initiatives and local authorities.
  3. Balancing Tenant and Landlord Rights
    • While abolishing Section 21 offers tenants security, the government must ensure landlords have efficient legal processes to reclaim properties when needed.

Conclusion

The landlord exodus could destabilise the housing market, driving rents higher and worsening homelessness. However, it also presents an opportunity to reshape the sector—if councils, communities, and policymakers act decisively. By balancing reforms with practical support for landlords and investing in social housing, the UK can navigate this transition and address the housing crisis effectively.