The recent slowdown in the sale of rental properties is raising concerns in the UK mortgage market. New research indicates that up to 100,000 ex-rental homes could remain vacant due to the Renters’ Rights Act, which may prevent landlords from re-letting properties that they attempt to sell.
What is the Renters’ Rights Act?
Enacted in May 2026, the Renters’ Rights Act introduces significant changes for landlords looking to sell their properties. If a landlord serves a Ground 1A notice to sell, they are subject to a mandatory 12-month ban on re-letting the property, even if the sale does not go through. This legislation aims to protect tenants but poses challenges for landlords who may struggle to sell their properties in a fluctuating market.
How is the mortgage market responding to these changes?
According to analysis from Hamptons, the proportion of homes listed for sale that were previously rented dropped to 9.2% in June 2026, down from 11.3% the previous year. This decline indicates that while some landlords are opting to sell, the overall pace has slowed. Notably, June marked a turning point where landlord purchases exceeded sales for the first time since 2019, suggesting a shift in market dynamics.
What does this mean for landlords?
For landlords, the implications of the Renters’ Rights Act are significant. The potential for up to 100,000 homes to remain unsold and vacant could exacerbate the housing supply crisis. The ban on re-letting properties could deter landlords from selling, as they face the risk of being unable to generate rental income during the waiting period. Moreover, the market is already experiencing challenges due to higher mortgage costs and tax changes that have gradually reduced the number of active landlords.
What should investors and brokers watch for in the mortgage market?
Investors and mortgage brokers should closely monitor the evolving rental market. With average rents for newly-let homes rising by 1.6% year-on-year to £1,392 in June, there may be opportunities for those willing to navigate the complexities introduced by the Renters’ Rights Act. Brokers should also keep an eye on the types of properties being marketed for sale, as flats, which made up 51% of rental homes listed last year, are particularly affected by these changes. For current mortgage rates, landlords should consider consulting current mortgage rates to make informed decisions.
Frequently asked questions
How will the Renters’ Rights Act affect rental property investments?
The Renters’ Rights Act may discourage landlords from selling properties, leading to a potential increase in vacant homes and affecting rental supply. Investors should consider these dynamics when assessing property investments.
What trends should landlords watch in the mortgage market?
Landlords should monitor changes in mortgage rates and regulations, as these factors can significantly impact their financial decisions. Keeping abreast of rental market trends will also be important for making informed investment choices.