The private rented sector has been beset with issues over the past two years. Landlords have been selling up, regulation is increasing, notably in the form of The Renters’ Rights Act which has fundamentally reshaped the landscape.
Operating costs have been rising continually and compliance requirements have become more demanding.
On the face of it, it doesn’t sound like the obvious sector in which to invest hundreds of millions of pounds.
But that’s exactly what Dwelly has done, having completed 10 acquisitions this year, building a portfolio of over 15,000 properties under management and establishing itself as one of the UK’s largest lettings businesses.
Its latest deal, announced last week, saw it acquire established London sales and lettings agency Paramount Properties, adding a further 1,100 fully managed properties to its network.
The deal follows a relentless acquisition drive during 2026, adding 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 $170 million 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.
And the reason? They say the industry’s long-term fundamentals look very different from the short-term headlines. Their 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 per cent of the combined owner-occupied and privately rented housing stock. Today, that figure stands at 23.3 per cent, meaning the proportion of homes accounted for by the private rented sector has almost doubled.
They say the industry’s long-term fundamentals look very different from the short-term headlines. Their analysis of historic government housing tenure data shows that the private rented sector has increased significantly since the turn of the millennium
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.
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
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.
Head of M&A Sam Humphreys (above, far right) said: “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 past 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.”
Related
More about Dwelly here