You may have seen one or two alarming headlines this week. "Private rented sector shrinks by £79 billion since 2022." "Buy-to-let exodus wipes £48bn from rentals."
To mention a few.
If you're a landlord, it's the kind of thing that can make you seriously pause for thought. And we understand that. Those numbers do sound catastrophic.
But before you call us in necessarily to sell off your existing portfolio, let's actually look at what Savills' analysis – the source behind the £79bn figure – is really telling us, because there's a difference between a market that's contracting and a market that's collapsing.
And here in Oxford, right now, where almost 20,000 households live in privately rented accommodation and where average rental values are now almost £1,918 per month (source: Dataloft by Pricehubble), the difference matters enormously.
What Do the Numbers Actually Say?
Savills puts the total value of England's privately rented homes at £1,556 billion in 2022, falling to £1,477 billion by late 2025, a net drop of 5.1% over three years. And that might be a little alarming, when you consider that the bricks-and-mortar value of properties, generally speaking, has increased in that time. In other words, the shrinkage isn't about falling prices. It's very much about fewer rental properties overall.
But as is so often the case, there is a bit of nuance to consider.
Here's what seems to be happening: traditional smaller landlords – the classic “individual” landlord with one to four properties alongside a full-time career – are selling up to owner-occupiers faster than new buy-to-lets are coming online.
Truthfully, we can all see reasons why. CGT jumping to 24% for residential property (up from 18%), frozen thresholds, plus the administrative weight of the Renters' Rights Act have tipped the scales for plenty of landlords who were already on the fence.
We hear it directly from our own clients. Higher taxes and higher costs to maintain properties, EPC requirements tightening, legislation changes that loom large. There are definitely added costs that weren't on the spreadsheet just two or three years ago. The arithmetic has changed, and it is true that some landlords are deciding it simply no longer adds up. However, whilst it is true that this is happening, there is more to the story – as we will show.
Why Landlords Selling Up Matters (For Everyone)
A smaller private rented sector means tighter supply, and that creates upward pressure on rents for the very tenants that recent changes are intended to help.
Rents rose 8.5% nationally last year. Here in Oxford the rise was even more staggering – up by 14% year on year according to Dataloft analysis.
The lettings picture generally would seem to be one where tenants have fewer options and landlords face more scrutiny. None of this happens in a vacuum.
But the headlines are missing some key information that really matters in order to paint the full picture.
Because the reality is that it's not all doom and gloom. Not even close.
Whilst there has been an undeniable shrinkage in the PRS, corporate landlords and institutions have, at the same time, been more active, buying up portfolios from many small landlords who have decided to exit, cushioning the net loss.
Other landlords – maybe the larger-type of smaller-landlord, for want of an easier way to describe them, with slightly larger portfolios – have moved their properties into a corporate structure (note – it doesn’t suit everyone, and before you rush to do this, it is key to talk to a professional advisor about what it entails!).
Overseas investors have put roughly £40 billion into UK build-to-rent over the past decade, with around £30 billion going into professionally managed blocks, much of it post-2022 (as revealed by Knight Frank in a separate news article last week).
It's not your traditional mum-and-dad buy-to-let model, and the timelines being discussed by Knight Frank’s analysts compared to Savills do differ. That said, it does clearly help to stabilise supply in some high-demand areas.
Whilst all that is happening, the buy-to-let sales market isn’t dead at all. There is a new profile of landlords quietly but actively getting on with it. Millennials and Gen Z investors are stepping into the breach, often via limited companies from the very start in order to sidestep the personal CGT and income tax issues that are encouraging older landlords out.
These are tax-savvy, tech-enabled landlord buyers, laser-focused on yield but also professionalised in their approach. In many ways, they're exactly the profile built for the current regulatory environment.
The Oxford Lettings Picture
The £79bn figure is a UK-wide average, and averages are notoriously good at hiding what's actually happening on the ground.
In Oxford, when it comes to rental stock, demand is consistently outstripping supply. Rents are up 14% year-on-year, as mentioned, and the sector is well supported by a professional and student lettings market. With two universities, a number of major and specialist hospitals, and an incredibly strong and growing research and technology sector, Oxford’s rental demand remains robust.
Yields are also typically beating savings rates – although this is more marginal. Nevertheless, when it comes to investing in Oxford, it is often less about the yield and more about the capital value. Institutional money is targeting managed blocks here, while quality single lets, like many of the homes we look after, continue to hold firm and attract strong demand from tenants locally.
If you own well-maintained property in Oxford and you're managing it properly, this still feels like a hold market, not a sell market – and anecdotally speaking, relatively few of the landlords whose properties we let and manage have opted to sell at this stage whilst rents are so strong and rising.
The Bottom Line
It is certainly a time to be mindful – but there is no need to panic. Now would be a wise moment to review your tax position, review your capital value and yield achieved, and even to do some general housekeeping ahead of legislation changes before they come in – i.e., checking your EPC rating is up to what the new standards will require in 2030 (if it comes to pass), and making sure your compliance is watertight as the Renters’ Rights Act implementation begins to roll in from 1 May 2026.
The Private Rented Sector is certainly not vanishing. But in many ways, it might be professionalising. The loss of value from the PRS might in truth be more representative of a changing reality for lettings in general – a move to professional corporate letting structures, for example, rather than a sign that a black hole is swallowing the market and leaving would-be tenants stranded.
The landlords who are thriving right now are the ones working with experienced, dedicated agents, staying ahead of regulation, and making decisions based on data rather than headlines.
Whether you're weighing up whether to hold, to sell tax-efficiently, are exploring a limited company structure, or are simply wondering whether it is time to place your property in the hands of a professional agent, we're here to help you model all scenarios properly – not to guess at them.
Is it a good moment to have a conversation about your portfolio? Get in touch with us here at Cherry Picked Residential today.
