Landlords are restructuring portfolios and financing in response to changing rental demand, rather than focusing on expansion, with the ONS announcement of a slowing in rental growth showing the need to ensure portfolios are right.
Although the new ONS figures show that UK monthly rental prices increased by 3.4% to £1,377 in the 12 months to March 2026 it was down from 3.6% for the 12 months to February 2026.
Alex Upton, managing director, specialist mortgages and bridging finance at Hampshire Trust Bank, said: “Rental growth has slowed from the peaks seen over the past two years, but the underlying pressure has not gone away. Demand continues to outstrip supply in many parts of the market, particularly for well-located and better-quality stock, and that imbalance is likely to persist while delivery of new housing remains below what is needed.”
A shift to refining portfolios
However, he said what has changed is landlord confidence. “Expansion is no longer the default response to rising demand. Investors are becoming more selective and more deliberate in how they deploy capital. The focus has shifted towards resilience, refining portfolios, strengthening income and moving towards assets that can perform more consistently under tighter regulatory and cost conditions.
“That shift is reshaping funding requirements. Landlords are not simply adding new properties, they are restructuring. This includes releasing capital selectively, consolidating borrowing and repositioning portfolios to reflect changing margins and longer-term strategy, often through more complex, transitional transactions.”
Sam Smith, director of investments and partnerships at Property Hub Invest, said landlords should take a long-term approach. “The residential investors we work with are focused on rental demand, long-term capital growth and building portfolios that work over decades and not months,” he said.
And although rental growth slowed in March, Tom Bill, head of UK residential research at Knight Frank, believes they could accelerate again with new legislative measures coming into force from May 1. “Although rental value growth has been declining, the Renters’ Rights Act could increase upwards pressure on rents as landlords mitigate higher risks around repossessing their property or guaranteeing rental income,” he said.
