The Intermediary – September 2026 - Flipbook - Page 40
I N T E RV I E W
explains. “In practice, it’s not going to work in
the same way as it’s written down, because
you’ve got a supply-demand mismatch.”
With landlords losing the options of payment
in advance and Section 21, for example, they
are more likely to pick and choose carefully
who they rent to. This will introduce an “awful
lot more diligence” and disadvantage any
deemed less desirable. This might be as simple
as choosing between a tenant with a pet and
one without, right through to penalising those
without a strong proven track record.
Sedgwick continues: “The act was meant
to support and protect the more vulnerable
tenants within society. Actually, they’ll be
deselected in favour of someone who, say,
works in the city and has a proven track record
of payments.”
Emerson adds that with around nine tenants
per PRS property at the moment, frustrations
with landlords are understandable for the
eight that do not make it, particularly if the
selection process is known to come down to
personal attributes.
“We’ve got an expanding population which
is growing faster than we can possibly increase
housing, so this problem is not going to go
away,” he says.
“There is also a natural balance in the market.
So, if you end up with pricing being too low,
that might sound good for tenants, but all of a
sudden people can’t meet their lending criteria.
“There are landlords now who are having to
support their rental properties because of the
difference between the rent and the cost of
running it. Meanwhile, if the only point where
they can fix their rent is when it goes back on
the market, rents could actually go higher.”
While places like Scotland have toyed with
rent controls, Emerson warns that they simply
increased rents long-term. There is no magic
solution to this problem, and certainly not one
that can be found in the pockets of landlords or
BTL lenders – it always comes back to supply.
“If we had a million more properties today,
we wouldn’t be arguing over the rent, we’d
be trying to give them away,” Emerson says.
“Playing whack-a-mole doesn’t resolve this.”
bringing it back up to standard, which a first
time buyer probably couldn’t do,” he says.
Rather than a mass exit, Sedgwick and
Emerson warn the dangers of landlord attrition.
Those exiting – either because the business is
no longer viable, or simply by ageing out – may
not be leaving in higher numbers now, but they
are being replaced at a slower rate.
“If you’re not replacing those people, you’re
going to end up with a shortage of landlords,
and therefore a shortage of PRS stock,”
Emerson explains. “It’s not about who owns
what property, it’s how regularly it comes to
the market. When people buy a property as
homeowners, they lock it up for a longer period
of time, whereas with a rental property, any
time one tenant moves out, there’s another
opportunity for someone else to move in.”
At first, the Act may appear to work as
intended. Sedgwick expects a good six to eight
months before the effects really emerge, and
before useful figures – such as around Section
21 – are available to assess. Longer-term, there
could be impacts that ripple across the market.
Emerson says: “In some areas of the country,
it’s cheaper to buy than rent. But that doesn’t
mean people should buy straight away. They
need to try living with their partner, for
example. The last thing we want is people
buying who are then going to split up six or 12
months down the line, who then both can’t
afford to run the house independently.
“So, people living together in rental
accommodation, saving their deposit and
actually buying in a more stable position, is
actually better for the buyer. Some people need
to rent while they build up their career and
salary to be able to buy, but that doesn’t mean
they shouldn’t be able to live in an area they
want to, so you need a blend.”
It is not as simple, then, as taking from
landlords to give to buyers. Indeed, to help
move the owner-occupier market forward, a
better lever might be supporting downsizers.
However, no Government is keen to tout the
image of removing – albeit willing – older
people from their houses, where tamping down
landlords is more likely to win votes.
Dramatic exit, or silent goodbye?
No market is an island
Fearmongers have long shouted about a
landlord exodus. While the real picture is less
simple, Emerson is clear that discouraging
independent landlords is short-term thinking
at its worst.
“Those are the people that pick up properties
on a development that don’t get sold, or that
need refurbishment, and spend the money
If 30 years has taught any lesson, it is that
the PRS is just one part of a wider machine.
Focusing on just the landlord cog is not going
to free up the mechanism elsewhere.
Sedgwick says: “The sector generates £45bn
worth of taxable revenue every year. If you
shrink that, then you’ve got to try and find
growth elsewhere.”
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The Intermediary | September 2026
