3 minutes reading time
(602 words)
Rent to Rent: Promise, Pitfalls, and the Pressure on Landlords
Property Quorum – Thursday 30th October at 10am
Rent to rent is one of those ideas that sounds simple enough on paper. A landlord leases a property to an operator, who then rents it out to tenants for a little more, keeping the difference. The landlord receives guaranteed rent, the operator makes a profit, and the tenants get a place to live. Everyone wins, or at least that is the theory.
At this week’s Property Quorum, Gareth Wax will be in the chair alongside Juliet Baboolal, Chris Gilsenan, and me, Hamish McLay, as we take a closer look at why this model divides opinion so sharply and what might now be threatening to shake it up.
For landlords, rent to rent can feel like a lifeline. With rising mortgage rates and more red tape than ever, a guaranteed rent payment from a trusted operator offers some welcome certainty. It takes the stress out of managing tenants and provides a steady income, even when the market feels unpredictable.
However, new tax proposals could shift everything. A recent article in The Negotiator reported that forty-five per cent of landlords say they would sell their entire portfolio if the government goes ahead with plans to make them pay National Insurance on rental income. That is almost half the market considering selling up.
If even a fraction of those sales take place, the knock-on effect could be dramatic. Fewer landlords would mean fewer homes available to rent, which could make life harder for rent to rent operators. Their business depends on leasing from private landlords, and if that pool shrinks, so too do their options.
If landlords decide to stay, many will look to recover higher costs by increasing lease fees to rent to rent operators. That squeezes margins further down the chain, meaning operators may have to raise rents for tenants or cut back on management and maintenance spending. Either way, the pressure rises.
On the other hand, there could be one unexpected beneficiary of all this change – estate agents. If landlords really do start selling, agents may see a surge in instructions. More listings could bring new business opportunities for sales teams, particularly as frustrated landlords look to cash out while prices remain steady.
Of course, that might not be the boost it first appears. A sudden rush of landlord sales could weigh on local property prices, especially in areas with high concentrations of rental homes. Estate agents might find themselves busier, but not necessarily better off, as the market adjusts to a new balance between sales and lettings.
Meanwhile, rent to rent operators face growing scrutiny. Councils are tightening up enforcement on HMOs and short-term lets, with more emphasis on licensing, safety standards, and proper permissions. Poorly managed arrangements have already caused enough damage to the sector’s reputation.
Still, there is potential for rent to rent to evolve. If smaller landlords sell up, larger and more professional operators could step in, running properties more efficiently and to higher standards. That could bring greater consistency and a more transparent, regulated sector.
The truth is that rent to rent has always been about balance – trust, management, and compliance. When it works, it can support landlords and tenants alike. When it fails, everyone feels it.
Join us for Property Quorum on Thursday 30th October at 10am, live on Spilling the Proper-Tea.
Contact:
For content enquiries:This email address is being protected from spambots. You need JavaScript enabled to view it.
For podcast/media info:This email address is being protected from spambots. You need JavaScript enabled to view it.
Watch live or catch up: https://www.youtube.com/@SpillingTheProper-Tea
Rent to rent is one of those ideas that sounds simple enough on paper. A landlord leases a property to an operator, who then rents it out to tenants for a little more, keeping the difference. The landlord receives guaranteed rent, the operator makes a profit, and the tenants get a place to live. Everyone wins, or at least that is the theory.
At this week’s Property Quorum, Gareth Wax will be in the chair alongside Juliet Baboolal, Chris Gilsenan, and me, Hamish McLay, as we take a closer look at why this model divides opinion so sharply and what might now be threatening to shake it up.
For landlords, rent to rent can feel like a lifeline. With rising mortgage rates and more red tape than ever, a guaranteed rent payment from a trusted operator offers some welcome certainty. It takes the stress out of managing tenants and provides a steady income, even when the market feels unpredictable.
However, new tax proposals could shift everything. A recent article in The Negotiator reported that forty-five per cent of landlords say they would sell their entire portfolio if the government goes ahead with plans to make them pay National Insurance on rental income. That is almost half the market considering selling up.
If even a fraction of those sales take place, the knock-on effect could be dramatic. Fewer landlords would mean fewer homes available to rent, which could make life harder for rent to rent operators. Their business depends on leasing from private landlords, and if that pool shrinks, so too do their options.
If landlords decide to stay, many will look to recover higher costs by increasing lease fees to rent to rent operators. That squeezes margins further down the chain, meaning operators may have to raise rents for tenants or cut back on management and maintenance spending. Either way, the pressure rises.
On the other hand, there could be one unexpected beneficiary of all this change – estate agents. If landlords really do start selling, agents may see a surge in instructions. More listings could bring new business opportunities for sales teams, particularly as frustrated landlords look to cash out while prices remain steady.
Of course, that might not be the boost it first appears. A sudden rush of landlord sales could weigh on local property prices, especially in areas with high concentrations of rental homes. Estate agents might find themselves busier, but not necessarily better off, as the market adjusts to a new balance between sales and lettings.
Meanwhile, rent to rent operators face growing scrutiny. Councils are tightening up enforcement on HMOs and short-term lets, with more emphasis on licensing, safety standards, and proper permissions. Poorly managed arrangements have already caused enough damage to the sector’s reputation.
Still, there is potential for rent to rent to evolve. If smaller landlords sell up, larger and more professional operators could step in, running properties more efficiently and to higher standards. That could bring greater consistency and a more transparent, regulated sector.
The truth is that rent to rent has always been about balance – trust, management, and compliance. When it works, it can support landlords and tenants alike. When it fails, everyone feels it.
Join us for Property Quorum on Thursday 30th October at 10am, live on Spilling the Proper-Tea.
Contact:
For content enquiries:
For podcast/media info:
Watch live or catch up: https://www.youtube.com/@SpillingTheProper-Tea
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