Britain’s Tale of Two Rental-Housing Markets

Britain’s dysfunctional property-rental market has endured successive governments attempting reform of its almost feudal system of amateur landlordism. Smaller landlords, with four or fewer properties, account for more than half of the 4.7 million households in the private rental sector.

Attempts to professionalize the industry have come at a huge cost to low-income families, and recent data make it clear exactly what’s going wrong and how it’s fast becoming a financial disaster for the government.

Private sector rental data for July from the Office for National Statistics show rents are stabilizing, with the first monthly fall in London for four years. Across the country average rents are 6% higher than last year, but this is down from 6.7% in June. Supply and demand are moving into equilibrium. The July housing survey from the Royal Institution of Chartered Surveyors revealed the depth of the crisis. A gauge showing the net balance of new landlord instructions — when properties are placed with estate agents for rental — last month dropped to minus 31%, the weakest in at least 30 years (barring April 2020’s Covid plunge, which was rapidly reversed).