The Intermediary – October 2026 - Flipbook - Page 34
BUY-TO-LET
Opinion
here is a
clear tension
developing
in the private
rented sector
(PRS). Zoopla’s
latest Rental
Market Report
shows that the number of homes
available to rent is 3% lower than a
year ago, the first decline following
three years of improving supply.
The flow of new homes coming onto
the rental market is also down, while
there are now 5.3 enquiries for every
32
The Intermediary | October 2026
rental property, the highest level for
almost two years. At the same time,
higher mortgage rates are keeping
would-be first-time buyers (FTBs) in
rented accommodation for longer,
adding further pressure to demand.
On the face of it, these conditions
might appear to make a compelling
case for landlords to expand. Rents
are also rising, with the Office for
National Statistics (ONS) recently
reporting annual rental growth
of 3.8% across new and existing
tenancies in the 12 months to August
2026, taking average monthly rents
to £1,400. Yet strong rental demand
and rising rents do not automatically
translate into beer investment
returns. For professional landlords,
the focus is increasingly on what
individual properties contribute to the
performance of their wider portfolios,
rather than simply acquiring more.
Making capital work
Rising rents should not be confused
with stronger returns. Borrowing
costs, maintenance, the cost of
meeting regulatory requirements and
the capital tied up in each property all
