It’s official: Britain is dismantling its private rented sector

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It’s official: Britain is dismantling its private rented sector

Well, who could have predicted that small landlords are leaving the private rented sector?

Thirty thousand small landlords in the UK apparently walked away from buy to let in the year to April 2025.

And that’s BEFORE the Renters’ Rights Act had even taken effect in England, while landlords in Wales and Scotland have also decided enough is enough.

If ministers are looking for a warning light on the dashboard, this one is flashing bright red.

The Telegraph reports that the number of small landlords fell for the first time in five years, while the income they declared also dropped.

Since then, landlords have been hit by the Act, higher stamp duty on additional properties and the continuing effects of a tax regime that has steadily made personally owned buy to let less attractive.

And we are still supposed to believe the landlord exodus is either not happening or is some sort of fallacy.

It really isn’t.

Blame Labour and the Tories

This is what happens when governments spend years making an ordinary business progressively less attractive, then express surprise when the people running those businesses decide to stop.

Labour deserves plenty of criticism, but let’s not forget that the Tories lit many of these fires.

Section 24, higher stamp duty and the original drive to abolish Section 21 did not appear after the 2024 election.

Labour has simply arrived on the landlord-bashing scene carrying a larger can of petrol.

The RRA has piled considerably more risk onto landlords. Possession is more complicated, regulation is heavier and the penalties are potentially enormous.

Add higher finance costs, maintenance bills and taxation and eventually the calculation becomes brutally simple.

Why do we even bother?

Landlords don’t have to be landlords

One Telegraph reader summed it up rather neatly: National Savings can provide a return without a tenant, a leaking roof or having to deal with a clueless council enforcement officer.

That is the comparison policymakers repeatedly fail to understand.

Property competes for capital and the bottom line is that a landlord does not have to remain a landlord.

If £250,000 can sit elsewhere producing an acceptable return without regulation, licensing, possession proceedings and the possibility of a £40,000 civil penalty, sentimentality about providing homes disappears remarkably quickly.

Some people in the Telegraph comments celebrated the sell-off because former buy to let homes might be bought by first-time buyers.

Some certainly will be, so good luck to them.

But this magical theory that every departing landlord creates one happy homeowner and removes one tenant from the market is economics of the playground.

The young professional moving cities, the divorced father needing somewhere quickly, the family unable to secure a mortgage, the student, the worker on a temporary contract and the household saving for a deposit still need somewhere to live.

Selling the house does not make those people vanish.

Landlords are selling up

And what happens when fewer landlords are competing for their business?

Goodlord says a third of tenants have experienced rent increases since the Renters’ Rights Act came into force.

Landlord Action’s Paul Shamplina told the Telegraph that he has never known so many landlords serving notices because they intend to sell.

This is where Labour’s supposedly pro-tenant revolution becomes deeply uncomfortable.

You cannot improve affordability by driving suppliers from a supply-constrained market.

You cannot increase choice by reducing the number of homes available.

And you cannot keep transferring risk and cost onto landlords while pretending none of it will eventually reach tenants.

The bigger question is what the PRS looks like when enough small landlords have gone.

Big is not always better

I keep reading that institutional investors and large corporate landlords will take a greater share of the market.

That is speculation, not evidence of some grand government plan, but the direction of travel deserves scrutiny.

Politicians appear instinctively suspicious of someone owning three terraced houses, yet strangely relaxed about institutions owning thousands.

A small landlord may know the property, know the street and answer the tenant’s call.

Increasingly, that landlord could be replaced by a corporate structure, a call centre and an algorithm deciding the rent.

For years, tenants and the wider public have been told that landlords were the problem.

Now landlords are solving that problem themselves.

They’re selling up, taking their money and leaving the risk, regulation and stress behind.

The government may soon discover that driving landlords out was considerably easier than replacing the homes they provided.

Until next time,

The Landlord Crusader

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Renters’ Rights Act blamed for shrinking rental supply

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Renters’ Rights Act blamed for shrinking rental supply

The Renters’ Rights Act has caused unintended consequences, with tenants struggling to find affordable places to live as landlords sell up.

The Daily Mail reports a growing imbalance between supply and demand as rents keep rising.

Propertymark urges the government to invest in the private rented sector to keep good landlords in the market.

Market is oversaturated

Many young people in London are struggling to find an affordable place to rent as rental supply drops.

Laura Meyer, 28, told the Daily Mail, a shortage of rental properties is driving competition among tenants.

She said: “The market is oversaturated right now, with fewer landlords and more people looking.

“One of the agents told me that normally in the summer she gets about 50 calls a day, but, because of the Renters’ Rights Act, she is getting more than 120. I have now put offers on three places, none have been accepted and I’m still looking. I’ve probably had to view about 50 places at this point.”

Lydia Holt, 25, also told the Mail she has been looking for a new place to rent in September but is finding it tricky to find anywhere affordable.

She said: “In Finsbury Park in London where I rent now, we got a three-bed for between £2,800 and £2,900, which is just shy of a grand a month each.

“Whereas now when we were looking at two beds you wouldn’t get anywhere decent for under the £2,800 mark. So it’s gone up around £400 each a month.

“When we spoke to estate agents they said: “We are just putting properties on the market for 20% more than what we think they should go for, because that’s what we think people would have offered.”

Biggest change in 30 years

Nathan Emerson, chief executive of Propertymark, told Property118 the Renters’ Rights Act has had unintended consequences for the rental market, although it may still be too early to assess its full impact.

He said: “Across England, the Renters’ Rights Act represents one of the biggest changes to the lettings sector in over 30 years, strengthening tenant protections but also creating unintended consequences. Some landlords are now reassessing whether they can remain in the sector, with others choosing to sell.

“This risks reducing private rented stock and putting heightened pressure on housing supply at a time of growing demand. Ultimately, the sector needs continued investment and appropriate support for good-quality landlords to ensure a diverse supply of homes keeps pace with ongoing real-world pressure already widely seen within the marketplace currently.

“However, considering we are only three months into the Renters’ Rights Act being implemented, it may still be too early to tell what proportion of them have started selling their properties as a result.”

The news comes as rent tribunal cases have surged since the Renters’ Rights Act took effect.

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The regulatory wrapper — why some freeholds are becoming toxic liabilities

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The regulatory wrapper — why some freeholds are becoming toxic liabilities

Recent reforms focus on correcting perceived failures in leasehold ownership. Less attention has been paid to how these changes alter incentives, redistribute costs and reshape the economics of responsibility.

This article examines how the removal of freehold value is transforming ownership from an income asset into a regulatory wrapper and some of the consequences that follow.

1. The death of the income asset

The effective removal of freehold value is not a technical adjustment. It represents a structural shift in residential ownership that is still being underestimated.

What was once an income-producing asset is becoming a regulatory wrapper: a non-economic liability responsible for management, enforcement, compliance, and, in some cases, extensive building safety obligations – all with no meaningful financial return attached.

2. Costs migrate: repricing the flat

The cost of sustaining that wrapper has not disappeared; it has shifted.

Increasingly, the value of the asset inside (the flat) will be determined less by location or specification and more by the fixed, non-negotiable cost of keeping the surrounding structure lawful, insurable and marketable. Regulation does not remove cost, it redistributes it.

3. Safety: the cost accelerator

Building safety has accelerated this repricing. Some wrappers now require substantial and ongoing funding simply to protect what sits within them.

High-value buildings can often absorb these demands; marginal blocks cannot. The result is sharply regressive: uniform regulatory burdens applied to very different economic realities, leaving some assets illiquid, or quietly toxic.

4. Leaseholders seek liability insulation

Market behaviour is entirely rational. Leaseholders will increasingly decline control of a now worthless freehold, preferring professional managing agents, compliance systems and insulation from liability even where this results in materially higher service charges. Control without upside is not empowerment, it is exposure.

In practice, the leaseholder’s primary role becomes funding and protecting the wrapper itself.

5. Risk migration: the flight to offshore

The ownership response will naturally follow. Freeholds carrying real legal and regulatory exposure but offering no economic reward will migrate towards thinly capitalised or offshore vehicles.

This is not ideological avoidance but basic risk management. Responsibility remains, but incentives to invest or engage diminish.

6. The fault line of defective leases

A further fault line is often overlooked: defective lease structures. Where collection or enforcement mechanisms are weak, the ‘worthless’ freehold becomes an active liability.

All the obligations still apply, but the means to fund them do not. Regulation assumes workability – many legacy leases do not provide it.

Conclusion: the repricing of responsibility

Whilst reform may be necessary, treating ownership as a moral problem rather than a question of who pays and who benefits carries consequences. The regulatory wrapper has not removed exploitation or expense, it has redistributed both, unevenly and with increasing visibility.

The market is not simply repricing freeholds, but the cost of carrying responsibility itself. That burden now sits squarely with the flat owner.

Unsurprisingly, future buyers will gravitate towards buildings where costs are fully costed and properly funded, accelerating fragmentation and offering little relief to owners trapped in poorly run and underfunded buildings.

Mark Wilson is a director of Myleasehold and a member of ALEP (the Association of Leasehold Enfranchisement Practitioners).

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