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April 30.2025
3 Minutes Read

Rental Property Shortage Alert: 37% of Landlords Plan to Sell Amidst Government Regulations

Real estate signs outside a UK building depicting rental property shortage.

Rental Property Crisis: A Significant Concern for Investors

In a worrisome trend reported by Pegasus Insight, it has been revealed that 37% of landlords intend to scale back their property portfolios within the next year. This abrupt shift in the rental market landscape heralds a potential shortage of available rental properties across the UK, raising alarms among property owners and investors.

The Changing Landscape: Landlord Sentiment

Data from Pegasus indicates a drastic increase in the percentage of landlords planning to sell, nearly doubling from 20% in early 2022 to the current 37%. The research highlights a notable decline in the number of landlords looking to expand their portfolios, dropping from 18% to a mere 6%, indicating a palpable sense of insecurity within the market.

Moreover, the survey unveils that nearly 39% of landlords are contemplating exiting the market within the next five years. While 22% claim they have no plans to sell, this sentiment among a significant portion of landlords portends troubling implications for future housing availability.

Sales Outpacing Purchases: Thankful for a Steady Yield

The imbalance in the market is stark, with sales nearly quadrupling purchases. Pegasus data reveals that recent landlords' sales activity stands at 22% against only 6% of landlords who have made acquisitions. Particularly telling is that a majority of active sellers, approximately 31%, are also those who are more heavily leveraged, holding four or more buy-to-let properties.

The implications of this trend are significant; about 58% of new property purchases are made by investors buying from existing landlords. Most properties leaving the rental market are being transferred to owner-occupiers, compounding the stock availability issues within the private rental sector (PRS).

Government Policy: A Double-Edged Sword?

Concerns are rising among landlords due to new government regulations and bills being proposed, notably the controversial Renters’ Rights Bill and stringent energy efficiency requirements. These developments have contributed to a compounded disillusionment among landlords, leading them to reconsider their investments. Mark Long, founder of Pegasus, has articulated the urgent need for policy reevaluation, emphasizing that landlords who contribute rental homes are essential for housing 19% of the UK population.

Long warns that should the government overlook the plights of landlords, the repercussions could amplify existing supply challenges, spurring further rental increases, and negatively impacting tenants.

Varying Impact on Regions and Landlords

The demographic split in landlord sentiment is telling. For instance, over 70% of landlords surveyed report robust tenant demand in their regions, with 37% indicating that demand is 'very strong.' The majority of landlords are still profiting, with rental yields holding steady at an average of 6.3% despite marginal declines from previous highs.

Nevertheless, landlords anticipating potential changes in capital gains tax remain on edge. This uncertainty in the regulatory environment could deter new investments, leading to a more pronounced scarcity of available rental properties across varying markets.

Future Outlook: Steps to Mitigate the Shortage

To combat this looming crisis, it's vital for landlords to engage in proactive discussions with policymakers and industry stakeholders about how to cultivate a more conducive environment for investment in the PRS. Fostering transparency and support will be essential for rebuilding trust among landlords while safeguarding the interests of tenants.

By navigating challenges together, both landlords and policymakers can advocate for a more balanced property market that recognizes the contributions of landlords while ensuring housing stability for renters.

The analysis highlights the urgent action required in the changing property landscape. Now is the time for informed decisions to prevent exacerbating the rental property crisis. Investors should closely track market trends, engage in dialogue with authorities, and remain vigilant in their property management strategies.

Investment

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01.22.2026

LendInvest and Castlelake Partnership: A New Era in Property Finance

Update Strengthening the UK Property Financing Landscape LendInvest, a leading online property finance platform, has strategically partnered with Castlelake, a global private credit investor, in a funding agreement worth up to £250 million. This collaboration is expected to significantly enhance LendInvest's capacity to provide bridging finance within the UK property market. The partnership allows Castlelake to purchase loans up to £15 million, enabling LendInvest to fund larger and more complex transactions. This not only expands the company’s regulated bridging loan offerings but also strengthens its positions in various facets of property finance, including development projects that often require rapid funding solutions. Embracing Complexity in Property Financing The evolving landscape of the property market increasingly demands financial products that can adapt to the unique and often complex needs of borrowers. LendInvest's Chief Capital Officer, Hugo Davies, emphasized the strategic importance of this new funding partnership. He noted that by enhancing their funding stack with Castlelake's capabilities, LendInvest can efficiently deliver larger loans and address market gaps where traditional lenders are not vying for business. Bridging loans have surged in popularity as a crucial financing tool for property investors, especially given the current economic climate marked by uneven mortgage approval processes. As property owners and investors navigate these challenging conditions, this partnership signifies a commitment from LendInvest to innovate and provide flexible solutions where conventional financial tools fall short. Implications for Property Investors and Owners For property owners and investors, the partnership between LendInvest and Castlelake offers notable benefits. As the bridging finance sector continues to mature, the ability to secure larger loans quickly will facilitate a more dynamic investment approach. Investors looking to acquire or develop properties can capitalize on opportunities without the frustration of protracted waiting periods often elicited by traditional mortgage processes. Moreover, this partnership aligns with LendInvest's mission to make property finance accessible and simplified for all clients. The recent robust performance of LendInvest, including an uptick in lending growth and a return to profitability during FY26, underscores the potential strength of this initiative. The investor confidence displayed by institutional partners signals a greenlight for property sectors often overlooked by mainstream lenders. Future Trends in Bridging Finance As the real estate market adapts to both challenges and opportunities, the role of alternative financing solutions, particularly bridging loans, is expected to grow. Analysts suggest that the partnership between LendInvest and Castlelake may trigger shifts in funding strategies across the market, potentially inspiring other lenders to explore similar collaborations to meet the emerging demands of property stakeholders. Furthermore, with the UK continuing to navigate post-pandemic economic realities, LendInvest's continual expansion into various lending sectors such as buy-to-let and development can provide a template for other lending institutions aiming to diversify their financial products effectively. This coordinated approach enhances investor confidence in bridging loans as a viable financial option moving forward. Conclusion: A Call to Action for the Property Market The recent partnership between LendInvest and Castlelake represents a significant step forward in addressing the evolving needs of property investors. As the market adapts, potential borrowers should remain proactive and informed about the growing range of financial products available. LendInvest has made it clear that they are committed to simplifying property finance for both new and existing customers—an essential resource in a constantly shifting landscape. With such partnerships paving the way for innovative solutions, property owners and investors are encouraged to stay updated on market trends and financing options that can empower their investment strategies.

01.21.2026

Tackling Economic Abuse: UK Finance Welcomes Eight New Signatories

Update UK Finance Expands Financial Abuse Code Coverage In a significant move to tackle the critical issue of financial abuse, UK Finance recently welcomed eight additional institutions as signatories to its Financial Abuse Code. This expansion includes prominent entities such as Coventry Building Society and Monzo, bringing the total number of participating firms to 33, encompassing 49 brands. This development ensures that nearly 90% of the UK’s mortgage market is now committed to supporting victim survivors of economic abuse, addressing a grave concern that affects approximately 4.2 million women in the UK, according to statistics from Surviving Economic Abuse. Strengthening Support for Victim Survivors UK Finance initially launched its Financial Abuse Code in April 2025, aligning it with the Financial Conduct Authority’s Consumer Duty framework. The code offers guidelines for lender practices to better support customers experiencing financial abuse, ensuring they receive empathetic and consistent care while regaining financial independence. Eric Leenders, the managing director of personal finance at UK Finance, highlighted the importance of this code, stating, “Financial abuse can happen to anyone. With more lenders joining the Code, coverage across the mortgage market has been strengthened significantly.” The Societal Impact of Economic Abuse Financial abuse is a form of economic control that can accompany wider domestic abuse scenarios, drastically impacting victims' lives. The recent statistics indicate a profound societal challenge where many women struggle to break free from their financial constraints. This initiative by UK Finance, recognized by both the government and various charities, is a crucial step in addressing the systemic issues that perpetuate this cycle of abuse. Commitment to Compliance by 2026 All newly signed institutions have pledged full compliance with the Financial Abuse Code by November 1, 2026. This commitment means they will implement practical measures throughout their operations to assist victims, such as specialized training for staff and tailored financial products designed to meet the needs of those recovering from abuse. Future Predictions: The Road Ahead for Economic Abuse Awareness As more institutions commit to practices that promote awareness and support for victims, it is expected that the landscape of economic abuse awareness will shift in the upcoming years. Greater visibility and understanding of financial abuse may lead to increased reporting and ultimately a reduction in occurrences. Experts believe that the integration of such policies not only strengthens victim support but also encourages a culture of accountability within the financial sector. Take Action: Informing the Community For property owners, investors, and the wider community, understanding the implications of financial abuse in property transactions is vital. Keeping abreast of such developments not only empowers stakeholders to make informed decisions but also fosters a supportive environment for those impacted by abuse. Engaging in dialogue surrounding these issues can promote greater awareness and solidarity within the community. Victims of financial abuse often feel isolated and trapped. By encouraging conversations and sharing insights, the finance and property sectors can play a monumental role in facilitating recovery and restoring independence to those affected. Interested parties are urged to stay informed and actively participate in initiatives that support this cause.

01.21.2026

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