Landlord property sales are continuing to reduce the supply of rental homes despite some stock being recycled within the sector according to new research from Pegasus Insight.
Data from the firm’s Landlord Trends Q4 2025 report shows that more than one in four landlords who sold property over the past year did so with tenants still in place.
In these cases, landlords typically sold an average of 1.8 properties, meaning some homes remained in the private rented sector after the sale.
Around 30% of properties sold by landlords were bought by another landlord, suggesting that part of the stock is being transferred rather than removed entirely from the rental market.
FIRST-TIME BUYER OPPORTUNITY
However, the research found that a larger share of sales are moving into owner occupation. Some 34% of homes sold by landlords were bought by first-time buyers, while a further 29% were purchased by other residential buyers, meaning those properties are likely to leave the private rented sector altogether.
Pegasus Insight said the figures point to a gradual contraction in rental supply, even though not every landlord sale results in an immediate loss of rental stock.
SHRINKING PRS
Mark Long (main picture, inset), Founder and Director of Pegasus Insight, says: “Landlord sales do not automatically mean a rental property disappears from the sector.
“In a meaningful minority of cases the property is simply being transferred from one landlord to another, and sometimes sold with tenants already in place.
“However, the overall direction of travel still points to a shrinking PRS. When a substantial proportion of landlord sales are going to first-time buyers or other owner occupiers, it inevitably reduces the pool of homes available for rent.”
REGULATORY IMPACT
He adds: “Policymakers must recognise the cumulative impact of ever tighter regulation and rising taxation on landlords, particularly smaller operators.
“Many are deciding that the pressures and uncertainty are no longer worth it. This is significant because the PRS provides homes for around 20% of the UK’s households, so policy decisions affecting landlords ultimately have consequences for tenants too.”
