Letting agents are being forced to overhaul their business models as landlords continue to exit the private rented sector, squeezing supply and reshaping the market.
New research from iamproperty suggests agents expect a significant drop in buy-to-let investors in 2026, with many forecasting a 71% reduction. The shift is creating a tightening pool of rental stock, even as rents continue to rise.
The findings, based on input from more than 320 agents and 350 consumers, point to a market caught in transition – where higher rental income is offset by declining volumes and fewer opportunities to grow managed portfolios.
Agents described the situation as a “double-edged sword”, with one noting: “It’s two steps forward, one step back. Rents rise, but stock just isn’t there.”
AGENCY STRATEGY
The report highlights a sector increasingly focused on diversification, as traditional landlord-led growth becomes less reliable and agencies look to new revenue streams to sustain momentum.
The changing landscape is forcing agencies to rethink their core strategy. Many are reducing reliance on landlord-driven business and placing greater emphasis on owner-occupiers and needs-based movers, reflecting a broader shift in customer mix.
This is also driving changes to staffing structures and skillsets, as agents adapt to a more advisory-led role across sales and lettings.
Another agent explained: “We’re changing everything about our strategy for 2026 and a big part of that is the shift in who our customer actually is – less landlord and rental and more owners.”
RENTERS’ RIGHTS ACT
Regulation is a key factor behind the exodus. Agents pointed to ongoing uncertainty around the Renters’ Rights legislation as a major driver, with many landlords choosing to sell ahead of incoming changes.
“We’re certainly seeing a lot of landlords selling up ahead of the incoming Renters’ Rights legislation and we totally get it,” one contributor said.
Sentiment towards the regulatory environment remains subdued, with just 26% of agents expressing optimism, despite broad support for higher standards across the sector.
Ben Ridgway (main picture), Co-Founder at iamproperty, says: “Letting agents are navigating a significant shift in the market and it’s forcing agencies to rethink how they grow and operate.
“At the same time, agents are adapting quickly, with many telling us they are changing their strategies, reviewing their customer focus and preparing for a different mix of business. This report gives letting agents a clear view of how their peers are responding and where the market is heading.”
