Hidden Housing Supply: What London Landlords Need to Know About New-Build Homes

The Changing Landscape of New-Build Homes in England

A recent report by Property Industry Eye highlights a significant shift in how newly built homes in England are allocated. Only 1 in 10 new homes are reaching the open market for sale. The remaining 90% are increasingly channelled into alternative tenure models: build-to-rent (BTR) developments, developer-led sales, and affordable/shared ownership schemes.

This trend is particularly pronounced in London, where the pressure on housing supply is acute. For landlords operating in the capital, these changes have practical implications for portfolio management, tenant relations, and market positioning.

Why Does This Matter to London Landlords?

The reduced availability of new-build homes for sale constrains first-time buyers’ access to homeownership, pushing more households into the rental market. For private landlords, this means:

• Rising Demand for Rental Properties: With fewer homes available to buy, more people will rely on renting, potentially increasing demand and allowing for selective tenant screening.

• Shift in Tenant Profiles: As shared ownership and affordable housing schemes become more prevalent, landlords may see changes in the demographics and expectations of prospective tenants.

• Increased Competition from Build-to-Rent: The growth of professionally managed BTR schemes can compete directly with private landlords, especially in well-serviced, new developments.

• Potential Policy Changes: Public concern over investor impact on housing availability may drive new policies affecting landlord operations, such as stricter regulations or taxes.

Practical Implications Across Landlord Profiles

• Single-Unit Landlords: May benefit from increased rental demand but should assess the impact of nearby BTR schemes that offer modern amenities and management.

• HMO Operators: Rising rental demand could support HMO growth, but changes in tenant expectations might require upgrades or enhanced services.

• Portfolio Landlords: Should review portfolio mix and location strategy to capitalise on areas with limited BTR competition and strong rental demand.

• Accidental Landlords: Might face longer void periods if competing with professionally managed BTR properties; understanding local supply channels is crucial.

Monitoring and Adapting to Market Dynamics

Given these shifts, landlords should take concrete steps:

1. Track Local New-Build Supply: Use tools like Alto’s property availability resource to understand how many new homes are entering the market for sale versus rent in your area.

2. Adjust Client Advice: If you work with tenants or buyers, set realistic expectations about the availability of homes to purchase and the attractiveness of renting.

3. Review Portfolio Strategy: Consider diversifying or upgrading properties to remain competitive alongside BTR offerings.

4. Prepare for Policy Changes: Keep an eye on government announcements that may affect investor purchases or rental regulations, and plan compliance accordingly.

5. Engage with Tenants: Open dialogue about local housing market realities can improve retention and satisfaction.

Benchmarking Local Impact

While national data indicates only 10% of new homes reach the sales market, local variations exist. Landlords should compare this against local planning authority data or consult estate agents specialising in new builds to benchmark supply constraints in their area.

Next Steps for London Landlords

• Schedule a portfolio review focusing on areas with rising BTR developments.
• Engage with your letting agent to understand shifts in tenant demand and expectations.
• Use property availability tools to monitor new-build supply channels monthly.
• Update your marketing to highlight advantages over BTR schemes (e.g., flexible tenancy terms).

How Rentals & Sales Can Help

Our team specialises in portfolio reviews, compliance audits, and pricing strategies tailored to the evolving London market. We can help you interpret local supply data, adjust your tenant engagement strategies, and prepare for upcoming regulatory changes to protect and grow your rental income.

Compliance note: This article provides general information and should not be taken as legal advice. Landlords should consult qualified professionals for specific compliance or legal matters.