One in Five Landlords Have Sold Up as Costs and Regulation Bite, Property Expert Says

Around one in five private landlords represented by central London property manager Eccord have sold or attempted to sell their holdings in the past three years, founder Jo Eccles told This is Money, reflecting mounting cost pressures and increasingly complex regulation that are shrinking supply in the private rental sector.

Eccles said the trend is driven by a rise in mortgage costs, higher taxes and service charges, growing repair bills and a heavier compliance burden that has pushed many smaller landlords to hand portfolios to professional managers or exit the market completely. The shift, she said, is creating risks for tenants and for the diversity of rental housing available, because institutional landlords typically target large build‑to‑rent projects rather than the varied stock private landlords provide.

Eccles, who runs Eccord, a property search and management firm specialising in prime central London and managing about 150 rental properties, predicted average house prices would remain largely flat over the next 12 months but flagged significant variation by location and condition. "There's a two‑tier market where pristine turnkey properties are being snapped up quickly for a premium, whilst those needing work are sticking," she said, citing buyers' reluctance to embark on renovations because of time and cost.

Looking further ahead, Eccles said long‑term forecasts remain uncertain after a decade marked by Brexit, the Covid‑19 pandemic, war in Europe and an inflation shock. She urged buyers to be strategic about internal layouts and long‑term marketability rather than relying on blanket expectations of rising prices.

On mortgage costs, Eccles said rates have fallen more slowly than many hoped and that buyers who have been waiting for larger cuts are increasingly choosing to proceed despite higher borrowing costs. She suggested the lowest fixed‑rate deals might settle around 3.5 percent within a year, absent a fresh inflation surge that would push rates higher.

Eccles recounted securing a five‑year fixed mortgage at about 1.2 percent in 2021, before the wave of rate increases that followed, and said in hindsight a 10‑year fix might have been preferable. She urged homeowners and buy‑to‑let landlords to explore remortgaging options early, noting that borrowers can often secure deals six to nine months ahead of a rate reset and should consult brokers to compare offerings.

The former Labour government’s target to build 1.5 million homes over a Parliament is "looking very unlikely," Eccles said, pointing to slow planning processes, a near 30 percent rise in construction costs and constrained affordability for first‑time buyers. Private developers, she said, will only build where they can sell profitably, and may hold land rather than risk losses.

Eccles warned that rising unemployment could further depress demand for housing. If joblessness climbs toward 5 percent, she said, consumer confidence and the willingness to make major financial decisions such as moving home would likely weaken. Speculation about potential new property taxes and changes to capital gains treatment for primary home sales has added to market uncertainty, she said, with attention focused on the upcoming Budget.

Buy‑to‑let returns in London are now often very slim, Eccles said, with net yields roughly 1 to 1.5 percent in some central areas, a level that in many cases does not cover landlords' costs. She contrasted that with yields on low‑risk government bonds that recently returned more than 4 percent, observations that help explain why some investors are questioning buy‑to‑let’s appeal.

Landlords also face operational risks, including void periods, non‑paying tenants and property damage. Tenants’ expectations have risen in the era of more working from home, Eccles said, increasing demand for faster maintenance and higher standards of presentation. The cumulative effect, she said, has led many conscientious landlords to sell, a development that could reduce the range of rental options available to tenants.

On investment locations, Eccles recommended areas overseen by long‑term institutional freeholders or developers that actively curate retail, public realm and local amenities, citing examples in London such as the Howard de Walden estate in Marylebone, the Cadogan Estate in Chelsea and CapCo’s transformation of Covent Garden. She warned against markets heavily dependent on student demand, saying rising tuition and alternative vocational options could weaken long‑run prospects in some university towns.

Discussing property types, Eccles said new builds can offer strong purchases but carry specific risks, including potential oversupply, cladding concerns and rising service charges driven by amenities such as gyms and pools. Period properties, she said, can provide scarcity value; she pointed to first‑floor flats with high ceilings and light as particularly attractive to many buyers.

On negotiating tactics, Eccles advised buyers to understand sellers’ motivations and to establish credibility with agents. She said non‑price elements, such as demonstrating a personal connection to a home or the ability to proceed without a chain, can sway sellers and occasionally secure a property at a lower price than a competing bid.

For first‑time buyers, Eccles recommended buying with a medium‑ to long‑term horizon rather than planning to move frequently, because high transaction costs such as stamp duty push purchasers to "futureproof" choices with spare rooms or good school catchments. Sellers, she added, should "price bravely and realistically" at the outset to attract competition rather than overvalue and risk a prolonged sale.

Eccles also noted demographic shifts affecting London, including a rise in American buyers and returning expatriates drawn by schools, culture and connectivity, and suggested that an investor visa for skilled entrepreneurs could bolster inward investment — a policy option that does not currently exist.

She concluded that technology and proptech developments altered how people search for and visualise property, and said she would invest in a proptech business if given a cash windfall. For now, her assessment points to a housing market in which micro‑market dynamics, regulatory changes and cost pressures will determine outcomes for landlords, buyers and tenants over the coming months.