Government forecasts sharp growth in private rental sector by 2035

Government forecasts sharp growth in private rental sector by 2035

The UK government predicts the private rental sector in England will increase by around 500,000 homes over the next decade, reaching more than 5.3 million households by 2035, according to a recent impact assessment.

The government’s forecast, published alongside the impact assessment for extending Awaab’s Law to private rentals, indicates steady growth in the number of households renting privately in England. As of 2026, approximately 4.8 million households are privately renting, with projections showing this figure surpassing five million by 2029 and reaching an estimated 5.38 million by 2035. This expansion reflects ongoing demand for private rented accommodation amid broader housing market challenges.

However, the government cautions that data on landlord numbers is outdated, with the most recent figures from 2019-20 indicating around 2.3 million landlords. The assessment notes uncertainty about future trends in landlord numbers due to limited data, suggesting potential consolidation in the sector as landlords seek economies of scale, especially in relation to remediation and compliance work.

Details of the government’s private rental sector projections

The government’s impact assessment, linked to the extension of Awaab’s Law—which mandates landlords to address hazards such as mould within strict timeframes—provides the statistical basis for the predicted growth. It states that the private rental sector in England currently houses nearly 4.83 million households and is growing at an annual rate of approximately 1.2%. This rate would see the sector exceed five million households by 2029 and continue expanding to over 5.37 million by 2035.

While the number of households renting privately is forecast to increase, the government acknowledges the difficulty in estimating changes in the number of landlords. The last comprehensive data on landlords is from 2019-20, showing about 2.3 million landlords in England. The assessment assumes this number will remain relatively stable but highlights the possibility of consolidation, where fewer landlords might control more properties to benefit from cost efficiencies, particularly in managing compliance and remediation obligations.

This potential consolidation could reshape the landlord landscape, with implications for smaller landlords and letting agents. Larger portfolios may become more common, driven by the need to manage increasing regulatory requirements efficiently.

Context of growth amid regulatory changes and housing demand

The predicted expansion of the private rental sector occurs in the context of ongoing housing supply shortages and affordability issues in England. Rising demand for rental properties is partly a response to challenges in homeownership, including high property prices and stricter mortgage lending criteria. This trend places additional responsibilities on landlords and letting agents to maintain standards and comply with evolving regulations.

Recent legislative developments, such as Awaab’s Law, reflect a government focus on improving property conditions and tenant safety within the private rented sector. The law requires landlords to address hazards like damp and mould within 14 days, increasing the urgency for landlords to ensure properties meet health and safety standards. The growth in rental households will likely increase the volume of compliance work and tenant interactions for landlords and agents.

Moreover, the sector faces ongoing reforms, including the Renters’ Rights Act and enhanced landlord licensing schemes in some local authorities. These changes aim to balance tenant protections with landlord obligations, affecting how portfolios are managed and how letting agents operate.

Implications for landlords and letting agents managing expanding portfolios

For landlords, the forecasted growth in the private rental sector suggests a need to prepare for increased regulatory scrutiny and operational demands. Managing larger portfolios or consolidating properties may become a strategy to achieve economies of scale, particularly in compliance and maintenance. Landlords should consider reviewing their property management practices to ensure they can meet tighter deadlines for repairs and hazard remediation, as required by laws like Awaab’s Law.

Letting agents will also face challenges as the sector grows. Increased tenant numbers mean more lettings, renewals, and compliance checks. Agents may need to invest in technology and systems to handle higher workloads efficiently while maintaining service quality. The potential consolidation of landlords could lead to larger contracts with agents, changing the nature of agency relationships and service delivery.

Both landlords and agents should stay informed about evolving regulations and local licensing requirements, as these can vary and impact operational procedures. Keeping thorough records of inspections, repairs, and tenant communications will be essential to demonstrate compliance and manage risks effectively.

Uncertainties and areas to monitor in the evolving rental market

While the government’s projections provide a framework for expected growth, several uncertainties remain. The lack of up-to-date data on landlord numbers complicates predictions about sector structure and ownership patterns. It is unclear how many landlords may exit the market or consolidate portfolios in response to regulatory pressures and economic conditions.

Additionally, the impact of future policy changes, economic factors such as interest rates and inflation, and shifts in tenant demand could influence the sector’s trajectory. The government’s assumption of a steady 1.2% annual increase in private renting may be affected by these variables.

Landlords and agents should watch for further government announcements and data releases that clarify these trends. Monitoring local authority licensing developments and compliance enforcement activity will also be important to anticipate operational impacts.

Steps landlords should take to prepare for sector growth and regulation

Landlords should review their current portfolio management strategies in light of predicted sector growth and tightening regulations. Ensuring all properties comply with safety and habitability standards is critical, particularly with Awaab’s Law requiring prompt remediation of hazards like mould.

Maintaining detailed records of property inspections, repairs, and tenant communications will support compliance and help manage disputes. Landlords might also consider whether consolidating properties or collaborating with specialist agents could improve efficiency and compliance outcomes.

Letting agents should assess their capacity to handle increased lettings volumes and compliance demands. Investing in property management software and training staff on new regulations can enhance service delivery and risk management.

Both landlords and agents should keep abreast of government guidance and sector developments to adapt policies and procedures promptly. Engaging with professional bodies and membership organisations can provide valuable resources and support.

Supporting landlords with compliance and portfolio management

The Landlord Association (TLA) offers practical support to landlords and letting agents navigating the expanding private rental sector and evolving regulations. Through membership, landlords can access compliance resources, document templates, and guidance tailored to new laws such as Awaab’s Law. TLA’s property management platform, ORBIT, currently in BETA testing, helps organise rental properties and portfolios, manage key documentation, and record inspections and repairs efficiently.

ORBIT’s developing features include tools to track compliance deadlines and maintain evidence of remedial actions, which are increasingly important as regulatory requirements become more stringent. Membership also provides updates on regulatory changes and access to expert advice to help landlords and agents stay informed and prepared.

Exploring TLA membership and ORBIT BETA access can assist landlords and letting agents in managing the operational challenges posed by sector growth and compliance obligations.

Looking ahead, the private rental sector’s expansion will require landlords and agents to be proactive in compliance and portfolio management. Staying informed and organised will be essential to meet tenant expectations and regulatory standards in a growing and evolving market.

Sources: Letting Agent Today