Rented property sees ‘largest worth decline this century’ as landlords unload to first-time patrons
- Total value of privately rented homes nosedives as some investors quit
The total value of privately rented housing nosedived last year as more landlords sold properties to owner occupiers, data shows.
Britain’s private rented sector saw its value decline by 5.1 per cent, or £48billion, in 2025, according to the estate agent Savills, which was the biggest drop this century.
Over the past three years, it has fallen by £79billion and is now worth £1.47trillion.
All other types of property grew in value over the same period as house prices edged up.
The Office for National Statistics found that prices increased by 2.4 per cent in the year to the end of December 2025.
However, Savills said this price growth had failed to offset the loss of value which resulted from rented properties being sold to homeowners, and therefore no longer being in the private rented sector.
Switching sides: Rented homes are increasingly being sold to buyers who want to live in them
Some landlords are selling properties as they are subject to increasing taxes, flatlining rents and stricter regulation.
This includes the Renters’ Rights Act, which comes into force on 1 May, and will give tenants the greatest increase to their rights in a generation – with landlords facing fines of up to £40,000 if they fall foul of the new rules.
And from April 2027, the tax investors who own properties in their personal names pay on their rental income will be levied at higher rates thanks to a change announced in Rachel Reeves’ November Budget.
| Type of property | 2025 value (£bn) | 2022 value (£bn) | Change (£bn) | % change |
| Mortgage-free owner occupied | 3,455 | 3,316 | 139 | 4.20% |
| Owner occupied subject to a mortgage | 3,132 | 2,935 | 197 | 6.70% |
| PRS* | 1,477 | 1,556 | -79 | -5.10% |
| Other | 672 | 635 | 37 | 5.80% |
| Privately Owned UK Housing | 8,735 | 8,441 | 293 | 3.50% |
| Social* | 443 | 400 | 43 | 10.60% |
| All UK Housing | 9,177 | 8,842 | 336 | 3.80% |
| Source: Savills Research | ||||
Lucian Cook, head of residential research at Savills, said: ‘Over the past 25 years, we’ve grown accustomed to a story of the private rented sector expanding at the expense of people’s ability to get onto the housing ladder.
‘[However] changes in tenancy legislation, higher operating costs and increased mortgage rates have prompted many private landlords to reassess their portfolios.
‘Larger landlords, better equipped to absorb added costs and requirements, have taken on some of this stock […] but others have been sold to owner-occupiers, reducing the sector’s overall size.’
Homes sold by buy-to-let investors are being snapped up by homeowners, the data suggests, as that sector has grown in value by £185million.
Young buyers have taken particular advantage.
Cook added: ‘With more former [private rented] stock available to buy, first-time buyer activity has been relatively strong in the context of post-credit crunch levels.
‘This has been supported by the less stringent application of mortgage regulations, falling mortgage rates and rising wages.’
However, he warned that, if the number of properties available to tenants continued to fall, this could drive up rents and therefore make it more challenging to save a deposit.
The increase in the value of privately owned housing since 2022 has largely been supported by a 4.7 per cent increase in outstanding mortgage debt held by homeowners, Savills said.
Over the past three years, the value of homes owned by occupiers with mortgages has risen by £197billion or 6.7 per cent, while the value of mortgage-free owner-occupied properties has risen by £139billion or 4.2 per cent.
The total value of all housing in the UK is just under £9.2trillion, Savills said, up by 3.8 per cent from £8.8trillion in 2022.
