UK house prices dipped again in August, with fewer buyers in the market, according to the latest RICS report. But for landlords, the real story is the slump in new rental listings—supply is tightening fast, rents are set to rise, and tenants face fiercer competition than ever.

Property prices slid nationwide, with East Anglia at minus 64% and the South West with minus 46% taking the biggest hits. But Northern Ireland bucked the trend—still climbing while the rest of the market cooled.

A spokesperson for a property broker, told surveyors: “The property market is continuing to see a lull in activity, with a further drop in house prices in this buyers’ market… Most are employing a ‘wait-and-see’ strategy, which could bring the market to a standstill until any property tax changes are ruled out.”

While the sales market continues to soften, the rental sector tells a different story. New landlord listings have dropped sharply, with a net balance of minus 37%—the lowest level since the early pandemic shock in April 2020.

Meanwhile, tenant demand remains stable at +5%, and expectations for rent increases are climbing: 27% of respondents anticipate further rises over the next quarter, with annual growth projected at roughly 3% nationwide.

A Commercial Director of Mortgages at a leading bank, sent out a warning, said: “A decline in landlord instructions is further evidence that supply is failing to meet the continuing demand for privately rented homes… We need to ensure that investment in the private rented sector remains viable, creating an environment where landlords feel confident to grow and maintain their portfolios.”

The current mismatch between tenant demand and rental supply presents landlords with a chance to secure stronger returns. Yet this advantage is tempered by the broader need for consistent, transparent policy—without which investor confidence may falter.

As property prices soften and inflation continues to cloud the interest rate horizon, value-driven landlords may find the most resilient yields in northern England and parts of the Midlands. These regions offer a more stable rental performance amid national volatility. 

However, the upcoming Budget could reshape the landscape, with potential changes to property taxation likely to weigh heavily on future investment decisions.