The UK private rented sector is facing a deepening supply crisis as rental listings fall to record lows as smaller landlords sell up, according to LandlordBuyer.
Only around 35% of privately rented homes in the UK are subject to buy-to-let mortgages, meaning many landlords are mortgage-free or lightly leveraged, enabling faster exits.
Recent industry surveys show 34% of letting agents reporting a surge in landlords selling, with smaller, independent owners leading the trend.
While interest rates have dominated debate around landlord exits, the data suggests borrowing pressure is not the main driver. Instead, regulatory complexity, the Renters’ Rights Act 2025, tax changes, compliance costs, and administrative burdens are prompting many landlords to leave the sector.
STOCK REDUCTION
Demand for rental homes continues to outstrip supply across much of the country, pushing rents higher and limiting tenant options. Analysts warn that the imbalance is being worsened by the ongoing reduction in available stock, rather than a sudden surge in tenant demand.
Jason Harris-Cohen, Managing Director of LandlordBuyer, says: “This isn’t distress selling. Many landlords are financially secure and mortgage-free, but they’re choosing to exit because the sector no longer feels predictable or proportionate in terms of risk and reward.
“Over recent years, landlords have faced a steady layering of regulation, tax changes and compliance obligations, often introduced with limited clarity around long-term direction.
“For smaller landlords in particular, the administrative burden has grown to a point where the effort and uncertainty outweigh the returns. What we’re seeing is not a sudden reaction to interest rates, but a considered decision by landlords who feel the private rented sector is moving away from them.”
REDUCED CHOICE
And he adds: “When experienced, responsible landlords leave, those homes don’t always return to the rental market.
“This reduces choice for tenants and puts further pressure on rents in already stretched areas. Without a more balanced approach that supports supply as well as tenant protection, the sector risks continued contraction, making affordability and access an even greater challenge for renters across the UK.”
