Landlords increasingly holding portfolios despite challenges

Landlords are increasingly holding portfolios rather than selling, despite the changes the PRS market has undergone this year.

That’s the conclusion from Virelle Group, a boutique estate agency specialising in new build rentals, property management and sales across London, Manchester and Birmingham, which has just celebrated its first anniversary.

Emily Robison, director at Virelle Group, said: “With the lettings market undergoing quite a few changes, it has been an incredibly busy first year for our offices. Despite a number of new legislations and tax implications, we are now seeing an increasing number of landlords holding on to their portfolio rather than selling.”

Two key reasons

She said there were two key reasons for this. “Firstly, the sales market has remained sluggish and apartment values have fallen significantly, which would see the majority of landlords make a loss if they sold up. Secondly, the Renters’ Rights Act and looming tax changes on rental incomes from April 2027 convinced a considerable number of private landlords to sell their properties this year. This has resulted in a supply shortage of homes for rent, creating an opportunity for remaining landlords who now benefit from strong tenant demand and the potential of higher rental yields.”

Virelle Group said a property that previously returned 4-5% annually could now generate 7-9%, reflecting recent rent-rise figures from Rightmove’s latest Rental Trends Tracker, which showed annual rent growth accelerating to 3.2% in London.

“In light of the Bank of England’s recent decision to increase interest rates to 4%, we expect more aspiring homebuyers to put their property search on hold and continue to rent, resulting in further growth for the UK rental sector and opportunities for landlords”, Robison added.