PRS facing toughest period in years
For much of the last two years, the narrative surrounding Britain’s private rented sector has been overwhelmingly negative.
Landlords are leaving. Regulation is increasing. The Renters’ Rights Act has fundamentally reshaped the landscape. Operating costs continue to rise and compliance requirements are becoming more demanding.
On the face of it, it doesn’t sound like the obvious sector in which to invest hundreds of millions of pounds.
Yet that’s exactly what Dwelly has done.
The company has now completed 10 acquisitions during 2026, building a portfolio of over 15,000 properties under management and establishing itself as one of the UK’s largest lettings businesses.
Its tenth deal, announced this week, saw Dwelly acquire established London sales and lettings agency Paramount Properties, adding a further 1,100 fully managed properties to its network.
The deal follows an already relentless acquisition drive during 2026, with Dwelly having added agencies including Goodwin, Lime Property, Albery Tyson, Elliot Oliver, Move, Eden Harper, AP Morgan, Settio and Shaws to its growing network.
Recently, the firm also secured $170m in new funding from some of the world’s leading technology investors, including EQT Growth and General Catalyst, to accelerate both its acquisition strategy and investment in AI.
So why?
According to Dwelly, because the industry’s long-term fundamentals look very different from the short-term headlines.
The company’s analysis of historic government housing tenure data shows that the private rented sector has increased significantly since the turn of the millennium.
In 2000, privately rented homes accounted for 12.5% of the combined owner-occupied and privately rented housing stock. Today, that figure stands at 23.3%, meaning the proportion of homes accounted for by the private rented sector has almost doubled.
In absolute terms, the number of privately rented homes has increased by almost three million over the same period, from 2.089 million in 2000 to 5.030 million today.
At the same time, Dwelly believes the sector itself is evolving.
Whilst some smaller landlords have chosen to exit in the face of increasing regulation, taxation and higher operating costs, those who remain are increasingly operating on a more professional footing, with greater reliance on experienced letting agents capable of navigating an increasingly complex legislative landscape.
The company believes that trend is only likely to accelerate as the Renters’ Rights Act beds in.
Rather than reducing the need for letting agents, Dwelly argues the reforms are increasing the value of those able to deliver high-quality, compliant property management at scale. For landlords, professional expertise is becoming more important than ever. For agents, operational efficiency is becoming just as critical as local market knowledge.
It’s here that Dwelly believes technology will play an increasingly important role.
Rather than replacing letting agents, the company’s AI platform has been developed to automate much of the growing administrative burden associated with compliance, maintenance, communication and day-to-day property management, allowing experienced teams to spend more time advising landlords, supporting tenants and building client relationships.
The company says this combination of technology and local expertise is the reason it has invested so aggressively in acquisitions throughout 2026, despite much of the wider narrative suggesting the opposite approach.
Sam Humphreys, head of M&A at Dwelly, commented: “If you judged the private rented sector purely by the headlines, you’d probably conclude it’s a market to avoid. Our view is very different.
We think the industry is becoming more professional, not less attractive. Whilst some landlords have understandably decided that today’s regulatory environment isn’t for them, those who remain need more support than ever before and that only increases the importance of high-quality letting agents.
When you step back and look at the long-term picture, Britain’s rental market has almost doubled as a proportion of the housing market over the last 25 years. That’s not a shrinking sector – it’s one that’s matured significantly and continues to play a vitally important role in meeting housing demand.
Our acquisition activity this year reflects that belief. We see enormous long-term opportunity in helping great local agencies become even stronger. Technology is a key part of that because it removes much of the growing administrative burden from agency teams, allowing them to focus on the advice, relationships and expertise that landlords and tenants value most.
For us, AI isn’t replacing the letting agent. It’s enabling the professional letting agent to become even more valuable.”