The UK’s private rented sector (PRS) recorded its largest decline this century in 2025, falling by £48bn in value as buy-to-let landlords continued to exit the market amid higher taxes and tighter regulation, according to Savills.
Meanwhile, the value of owner-occupied housing increased by £185bn in 2025, according to Savills. The rise reflects a growing number of mortgage-free homeowners, alongside higher levels of mortgaged ownership supported by increased activity from first-time buyers.
Savills’ analysis of the total value of the UK’s housing stock shows that the private rented sector is the only tenure to have contracted over the past three years. While the overall housing market grew by 3.8% — equivalent to £336bn — the PRS declined by 5.1% over the same period.
The sector has now shrunk for three consecutive years. Since 2022, the value of privately rented homes has fallen by £79bn, as rising property prices have not been enough to offset the reduction in rental stock.
“Over the past 25 years, we’ve grown accustomed to a story of the private rented sector expanding at the expense of people’s ability to get onto the housing ladder. But while deep-seated housing challenges remain, lighter regulation in the mortgage market and tighter oversight of the private rented sector are gradually beginning to shift that narrative,” said Lucian Cook, head of residential research at Savills.
“Changes in tenancy legislation, higher operating costs and increased mortgage rates have prompted many private landlords to reassess their portfolios. Larger landlords, better equipped to absorb added costs and requirements, have taken on some of this stock, contributing to a more professionalised PRS. But others have been sold to owner-occupiers, reducing the sector’s overall size,” he continued.
Value of UK housing by Tenure
| £bn | 2025 | 2022 | Change | % change |
| Mortgage-free owner occupied | 3,455 | 3,316 | +139 | +4.2% |
| Owner occupied subject to a mortgage | 3,132 | 2,935 | +197 | +6.7% |
| PRS* | 1,477 | 1,556 | -79 | -5.1% |
| Other | 672 | 635 | +37 | +5.8% |
| Privately Owned UK Housing | 8,735 | 8,441 | 293 | +3.5% |
| Social* | 443 | 400 | +43 | +10.6% |
| All UK Housing | 9,177 | 8,842 | +336 | +3.8% |
Source: Savills Research
* valued subject to the occupational rights of tenants
Growth has been driven by owner-occupied housing. Over the past three years, the value of mortgaged owner-occupied homes has risen by £197bn – outpacing the £139bn increase in the value of mortgage-free owner-occupied properties.
The hike in the value of privately owned housing since 2022 has largely been supported by a 4.7% increase in the levels of outstanding mortgage debt held by homeowners.
Cook added: “With more former PRS stock available to buy, first-time buyer activity has been relatively strong in the context of post credit crunch levels. This has been supported by the less stringent application of mortgage regulations, falling mortgage rates and rising wages.
“But there are still significant barriers to owning a home, and part of the growth in mortgaged home ownership is down to people taking longer to pay off their mortgage debt. The reduction in homes available to rent will also continue to push up rents, posing challenges to those who are struggling to save for a deposit.”
