The Renters’ Rights Act and the changing lettings landscape

There was a prolonged period of uncertainty surrounding the Renters’ Rights Act ahead of it receiving Royal Assent at the end of 2025. Our report found that many investors affected by the Act plan to rethink their strategies. Some intend to shift their focus away from long‑term residential holdings towards alternative asset types, such as mixed‑use opportunities, while others may opt to scale back their portfolios altogether.

And the additional investment income tax exposure announced in the Budget is expected to accelerate changes in the private landlord landscape, putting pressure on margins for portfolio landlords and buy‑to‑let investors. All this is set to remain a major driver of stock coming to auction throughout 2026.

We also expect buyers to take a more selective approach to bidding, with a clearer divide emerging between less experienced landlords and more established, professional investors who are better equipped to adapt to the new environment.

Sensible pricing is key

Owner-occupiers, private developers and full-time investors continued to make up the majority of auction activity. However, rising development costs and tighter margins have naturally encouraged a more cautious stance when bidding.

Pricing sensitivity and the ability to add value remained central themes throughout 2025. Setting guide prices that reflect perceived value plays a crucial role in drawing in a wide range of buyers and sparking competition on auction day. Well-priced lots typically attract more bidders and, buoyed by auction momentum, often outperform expectations. Conversely, sellers who adopt overly ambitious pricing can find it harder to achieve a sale, particularly when facing remortgaging deadlines or year-end pressures.

Value and opportunity in the year ahead

A more settled financial backdrop following the Budget has helped support a more optimistic outlook, especially within the residential sector, where returns remain competitive compared with the wider market. Investors are expected to take an increasingly yield-driven approach in 2026, sharpening demand for sensibly priced opportunities.

With house prices forecast to rise by around 2% this year – and a stronger recovery projected from 2027, leading to approximately 22% growth over the next five years – the medium-term picture appears more positive. For buyers who purchase wisely at auction in 2026, there is a real opportunity to secure value now and benefit from future growth as market conditions improve.

Further information

Contact Gary Murphy