Mark Foxcroft at Devonshires examines how sweeping reforms are reshaping the Private Rented Sector, demanding higher standards, professional management, and shifting power toward institutional landlords.
The UK’s Private Rented Sector (PRS) is facing a seismic shift. Long characterised by fragmented ownership and inconsistent standards, the PRS is now the focus of a concerted Government effort to professionalise its operations, management, and regulatory framework to make it more akin to the Social Housing Sector (SHS). Unlike the SHS, which has long operated under a proactive regulatory regime, the PRS has historically faced much more light touch regulation.
The Government hopes to professionalise the PRS by introducing or enhancing several key pillars. This includes improving standards and regulation, professionalising management, boosting predictability and transparency, and encouraging institutional investment. For tenants, this should mean better service, more secure housing and higher quality homes. For the market, it promises stability and long term investment, which will help to meet housing demand. And for the Government, it supports broader housing policy goals around affordability, safety and sustainability.
Overall, this focus on the PRS is unsurprising given its market size. The Government’s recent “English Private Landlord Survey 2024” showed the number of PRS households rising from 3.1 million to 4.7 million between 2008-09 and 2023-24 to become England’s second largest tenure.
Reforming the PRS
The professionalisation of the PRS is not a new concept. It gained momentum with the formerly named Renters’ Reform Bill, first announced in 2022, and further with subsequent Government consultations.
This Bill transitioned into the Renters’ Rights Bill, which is expected to become law in Autumn. The aim remains the same, as the Government seeks to rebalance the relationship between landlords and private tenants.
The Bill marks a critical turning point for the industry, seeking as it does to close the gap between private and social housing by creating a fairer, more transparent, more regulated, and reshaped rental market. It will increase landlord accountability and enhance tenant rights.
The Bill seeks to do this with numerous new measures, including a new mandatory redress scheme and a PRS Landlord Ombudsman. Providing “quick, fair, impartial and binding resolution for tenants’ complaints about their landlord”, these would bring tenant landlord complaint resolution on par with the more established social housing tenant redress practices and require PRS Landlords to have in place robust complaints procedures.
Alongside this, a new PRS Database is proposed. Landlords will be legally required to register details about themselves and their properties, with the database showing any offences or penalties they have incurred.
There are also plans to abolish ‘no fault’ evictions to reassure, as the MHCLG has stated: “tenants then can challenge bad practice without the fear of retaliatory eviction, as landlords will need to provide a valid cause to end a tenancy early”.
While this is laudable, the reality is that the removal of no fault evictions will mean the already strained County Court possession process will come under further pressure due to additional time needed for possession hearings. This may ultimately lead to a worse situation for both PRS landlords and tenants, with cases dragging on for many months.
At the same time, landlords will have to reckon with the extension of Awaab’s Law to the PRS. This will set clear legal expectations of the timeframes within which PRS landlords must take action to make homes safe where they contain serious hazards. Moreover, this Bill and ongoing consultation on a reformed Decent Homes Standard for social and privately rented homes (ending on 10 September) seek to establish the minimum housing standards these tenants can expect from landlords. This will create safer homes.
Finally, the currently open LAFRA 2024 consultation on strengthening leaseholder protections over charges and services (closing on 26 September) seeks to regulate and introduce mandatory qualifications for managing agents. This upskilling of managing agents, who play a vital and ever growing role in the management of PRS stock, will further embed professionalism, hopefully addressing one of private tenants’ major gripes: dissatisfaction with the agent that manages their property and with whom they have most contact.
Taken together, these reforms represent the most significant overhaul of the PRS in decades, with consequences for the market and smaller landlords therein.
The Future of the PRS
The reforms are expected to affect smaller landlords disproportionately, with their less sizeable portfolios and often more limited resources to meet requirements. Maintaining profitability over the years has become increasingly difficult due to new tax laws, increased legal obligations and compliance, and increasing costs; this is set to continue with new requirements surrounding damp and mould, fire risk, and electrical and gas safety. The trickle of smaller landlords leaving the market is already approaching a stampede, with financial advisors all too happy to point towards other wealth management products.
By contrast, larger landlords and institutional investors will find themselves better equipped to adapt. With dedicated property management teams and access to economies of scale, they can navigate these regulatory changes more effectively. This dynamic is driving a shift in ownership structures, with many landlords now operating through limited companies, a trend that has grown from 36% to 66% over the last five years.
The likely result is a consolidation of the market, where large, professional landlords dominate, and smaller, individual landlords either exit or partner with management agencies. This shift is already visible in the Build to Rent (BTR) sector.
BTR developments are purpose built rental properties, often managed by institutional investors. They offer high quality housing, professional management, and amenities that appeal to modern tenants. According to Savills, the UK’s BTR stock reached 127,000 homes in Q1 2025 (up by 16% compared with Q1 2024), with 50,000 more under construction and 110,000 in planning.
While BTR currently represents just 2% of the UK PRS, its footprint is growing, especially in urban centres like Manchester, where it accounts for nearly 25% of rental stock and there is significant room for expansion.
Labour’s target of 300,000 new homes annually by the late 2020s hinges on a mixed tenure approach, with BTR playing a central role. However, challenges remain, including building safety delays and planning bottlenecks, which threaten housing delivery targets.
A Worsening Housing Crisis
While professionalisation rightly aims to improve housing standards and tenant protection, it may inadvertently exacerbate the housing crisis. As smaller landlords exit and regulatory burdens increase, rental stock may decline, particularly in the short term. This is confirmed by RICS, which sees “landlords continue to leave the sector” as the number of rental properties coming to market fell sharply for the 11th straight month in June 2025. Meanwhile, BTR developments take time to build, creating a mismatch between supply and demand.
The Zoopla Market Report (June 2025) notes a 21% rent increase over three years, with rents rising 2.8% over the 12 months to April 2025. Crucially, demand remains 60% above pre pandemic levels, underscoring the urgency of increasing supply.
Without rent controls, rising rents could undermine the Renters’ Rights Bill’s ambitions. The Government must balance regulations with support for housing delivery to avoid deepening affordability issues.
A Sector Reimagined
It is crucial to prepare for the evolution of the PRS. It will be vital to understand the multitude of legislative reforms, review and upgrade property standards, and strengthen documentation and processes. For PRS landlords of all sizes, conversations are needed to consider professional management, reassess financial and ownership structures, and prepare for market consolidation.
Mark Foxcroft is a partner at Devonshires