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Established property investors and larger firms continue to commit to the property market.
The Renters’ Rights Act marks a significant shift in the UK housing market, introducing tighter regulation aimed at improving tenant security and raising standards across the private rented sector. With measures such as the abolition of fixed-term tenancies and increased compliance requirements, the reforms are expected to reshape how landlords, investors and property businesses operate.
Since the Bill was introduced in September 2024 and ahead of its implementation in May 2026, there has been widespread debate about its potential impact. Discussions have centred on whether increased regulation could deter private landlords, reduce rental supply and ultimately push up rents. At the same time, others argue the changes could accelerate the professionalisation of the sector, creating opportunities for better-capitalised investors and corporate operators.
To understand how the market is responding, Investec has surveyed clients across the UK property sector, including private landlords, institutional investors and senior decision-makers.
While each case is different, early indications suggest that rather than a uniform retreat, the Act is reshaping the nature of the market – with some operators stepping back, and others leaning in.
Opportunity for landlords
Mandeep Dhillon, Private Banker, says, established landlords are poised to expand their portfolio as tenancy lengths could increase: “Falling levels of rental stock in the UK show there may be an opportunity for landlords who remain invested in the sector. While the end of fixed-term contracts could mean rental income seems less reliable, the length of some tenancies might increase if occupants seek long-term stability.
At a time when some private landlords are exiting the market, we have been asked to help property entrepreneurs purchase additional units using buy-to-let mortgages. Typically, these individuals have administrative support to handle increased regulation and have spread their risk across multiple units.”
Co-living solutions
Meanwhile, William Scoular, Head of Business Development, Real Estate, notes that the nature of rental accommodation could fundamentally change
“Both the decline in number of small-scale private landlords, and the renewed focus on high quality accommodation, favour large-scale developers. It is therefore unsurprising that institutional investors tell us they will maintain their investment in the build-to-rent sector. We are also expecting an increase in the provision of accommodation that suits both short-and long-term occupiers. Co living is emerging to suit the needs of the more transitory occupier whilst single family housing offers longer term family homes.
William adds, “In all cases, rental returns need to be considered carefully, given median rent data shows that affordability pressures have constrained rental growth in London over the last two years.”
Rents could move higher
Liam Gribben, Executive Director, UK Advisory (Property Services) says diversification remains front of mind for property firms, noting: “The Renters’ Rights Act is the latest change shaping the operating environment for property agents and management companies.”
“As with most regulatory shifts, larger and better-capitalised firms are more likely to absorb the cost of compliance, while smaller or weaker operators may struggle and exit the market. This could drive further consolidation – particularly in lettings, where a small number of providers account for most breaches – and result in a more professional and stable sector. Over the longer term, rents could move higher as costs are passed on,” Liam adds.
“Industry feedback suggests the Act is not a major driver of corporate strategy, as much of its impact is already reflected in existing plans. Instead, it reinforces a longer-term trend to diversify by offering ancillary services alongside lettings management. This is an area we continue to help our clients to explore.”
This article is for general information purposes only and does not constitute financial or investment advice. The views expressed are not necessarily those of Investec. Eligibility criteria and terms and conditions apply. Your property may be repossessed if you do not keep up repayments on your mortgage.