Last week, The Telegraph reported that an estimated 30,000 small landlords had left the sector in the year to April 2025, the first fall in landlord numbers for five years.

I was asked to comment on the figures and warned that this decline was likely to be “just the beginning”. Since then, I have reflected further on what the data tells us and, perhaps more importantly, what it does not yet show.

Property income declared by small landlords also fell by £10 million, while the average small landlord reported rental income of £20,500, only £200 more than the previous year before inflation is taken into account.

These figures should concern everybody who depends on the private rented sector, not only landlords. However, the most important detail is the period they cover as the data only takes us to April 2025, before the Renters’ Rights Act came into force on 1 May 2026. It therefore does not capture the decisions that thousands of landlords have made in the run-up to, and since, its implementation.

In other words, this is not a picture of the exodus we are seeing now. It is the warning that came before it.

Smaller landlords are deciding enough is enough

It would be wrong to blame one piece of legislation for landlords leaving, it follows years of cumulative pressure which have led to this, but the Renters’ Rights Act has undoubtedly been a tipping point for some.

Landlords have faced higher taxation, increased stamp duty on additional properties, rising mortgage costs, more expensive maintenance and repairs, and an expanding list of legal and regulatory obligations. At the same time, many have found that the returns no longer justify the financial exposure, workload and risk involved.

The government figures relate to smaller landlords operating in their own name rather than through limited companies. These are often people with one or two properties, not large institutional investors with specialist compliance teams. When the economics stop working or the regulatory burden feels unmanageable, their realistic choices are limited: invest more, restructure or sell.

Increasing the stamp duty surcharge on additional residential properties from 3% to 5% in October 2024 also made it considerably more expensive for new landlords to enter the market or for existing landlords to expand. We cannot look only at how many landlords are leaving, we should also consider how difficult the environment has become for replacement investment.

What I am seeing on the ground

Since the Renters’ Rights Act came into force on 1 May, I have never known so many landlords serve notice because they have decided to sell.

Some had already been reviewing their position and regarded the Act as the final push. Others were worried about losing Section 21 and wanted to regain possession while the previous process remained available. Many simply told us they had had enough and no longer believed it was worth being a landlord in 2026.

That does not mean every landlord should panic and head for the exit. There are still professional, well-informed landlords who intend to remain and who can make a success of letting property. However, most are reassessing portfolios much more critically. A marginal property, a heavily mortgaged investment or a tenancy that has become difficult to manage can now be enough to change the calculation.

The lag in official data means the full effect will not become visible immediately. The figures for 2025 and 2026 are likely to show the decline accelerating, and by the time that is confirmed, many of the homes involved will already have left the rental market and it is tenants that will feel the consequences. The uncomfortable truth is that tenants will be the biggest losers as rental supply continues to fall.

The Renters’ Rights Act was introduced to give tenants greater security and improve standards. Those are reasonable aims. However, stronger rights on paper do not solve the problem faced by a tenant who cannot find a suitable home or afford the rent being asked.

When supply shrinks but demand remains strong, tenants face more competition, less choice and upward pressure on rents. Good tenants with stable incomes and strong references may still find themselves competing with several other applicants. Those with a less straightforward rental history are likely to find it even harder.

That is the contradiction at the heart of current housing policy. The Government wants a more secure and professional private rented sector, but it cannot achieve that by continually increasing the cost, complexity and risk carried by the people expected to provide the homes.

What needs to happen now

In my view, the conversation cannot stop at whether landlords are leaving. The more important question is what would persuade responsible landlords to remain and others to invest.

That requires a stable, workable tax and regulatory environment, clear guidance, properly resourced courts and enforcement, and confidence that landlords can recover their property within a reasonable period when they have a legitimate ground for doing so. If possession cases take many months to resolve, the abolition of Section 21 will feel far riskier in practice than ministers suggest.

Landlords also need to prepare rather than wait for a problem. They should understand the new possession framework, review their tenancy documents and compliance, keep accurate records, and take advice before serving notice. The post-Section 21 system will leave far less room for incomplete paperwork or poorly evidenced claims.

Thirty thousand landlords leaving in a year is significant, but the age of the data makes it more concerning. It shows that confidence was already weakening before the biggest reform of the sector in a generation took effect.

If the Government ignores that warning, future figures may confirm what many of us are already seeing: the landlord exodus is not coming. It is under way – and tenants will pay the price if nothing is done to address it.