For the first time in decades, the property market is bracing for significant change. The Labour Government has just introduced the much-anticipated Renters Reform Bill and it’s highly likely this shake up to the private rental market will be followed by the alignment of Capital Gains Tax with Income Tax at the Autumn Budget.

With significant changes on the horizon, many private landlords will conclude that the logical decision is to exit their portfolios, sell up and avoid the new restrictions or high tax rates. 

For these landlords, they face a combination of pressures; from the tightening of yields due; to a higher interest rate environment; to the legislative uncertainties brought by the Renters Reform Bill; all set against a highly challenging property market that has been unforgiving and has cooled off since the election was called.

As you might imagine, many of these landlords will seek to avoid the stress at pace before these new rules of engagement come into law. In this environment, the auction market, with its rapid and secure sales process, has become an increasingly attractive exit route for landlords looking to divest quickly and efficiently.

Indeed, Eddisons, through its auction brands, is experiencing this shift firsthand, with a significant portion of our lots represented by private landlords looking to offload assets quickly to get ahead of the imminent changes.

In short, there should be no surprises for the sector. The new Bill was touted by the previous government and Labour has just got on with it. And, while the alignment of Capital Gains was not in their manifesto, it’s an obvious decision given that they had already ruled out increasing taxes on working people.

For many, the Renters Reform Bill will be a needed piece of legislation that will protect the most vulnerable from homelessness, but there may be some unintended consequences as the property market responds to these changes. 

We could definitely see a supply squeeze in rental stock, leading to higher monthly payments and potentially impacting living standards if landlords reduce property maintenance. 

While our auctions business is well positioned to help those landlords wanting to exit the market, the Government’s actions will significantly alter how the private rental market operates. 

It may look sensible in the short-term, but these decisions could put pressure on our communities as previously rented properties go private or larger organisations build up their assets as private landlords exit the market.

• Andy Thompson is National Director at Eddisons’ Auction Division *