Landlords are leaving the private rented sector (PRS) in growing numbers but it’s often the most responsible landlords who are deciding to exit.

These are landlords who maintain their properties well, offer flexibility to tenants with pets or benefits, and provide stable, long-term homes. Their departure isn’t just about losing rental stock. It’s about losing quality and trust in the market.

What’s driving the exit?

A recent survey shows around one in three landlords are considering selling some or all of their properties. Smaller landlords with one or two rentals are the most likely to leave.

Key reasons include:

• Rising regulation: Upcoming changes like the abolition of Section 21 “no fault” evictions under the Renters’ Rights Bill, stricter property standards, and energy efficiency requirements such as the EPC C target increase costs and complexity

• Higher expenses: Maintenance, insurance, and mortgage interest rates have risen sharply, squeezing landlord profits. The Bank of England’s base rate currently stands at four per cent, influencing mortgage costs

• Tax changes: The phased removal of mortgage interest relief (Section 24) means many landlords pay tax on income they don’t receive, impacting profitability

For many small or long-term landlords, the balance of risk, cost, and time commitment no longer feels worthwhile.

Landlord Action founder and respected private rented sector expert Paul Shamplina who is also a landlord himself, says:

“Now more than ever, good landlords need to be encouraged to stay in our sector - those that are responsible, that can adapt, and be professional landlords. I’ve always said landlords who give tenants reduced rent and longer-term tenancies should receive some sort of tax incentive. We need to encourage good landlording, with higher standards that offer tenants better homes and secure tenures. If landlords sell, good tenants get asked to vacate. Obviously, they’re hoping the banning of Section 21s will be abolished.”

Who’s replacing them?

Properties being sold often end up as owner-occupied homes or bought by larger investors focused on maximising returns. This reduces the supply of affordable, flexible rental homes.

Tenants who rely on landlords willing to accept pets, benefits, or less-than-perfect credit may find it harder to secure housing. The loss of responsible landlords risks pushing vulnerable tenants into lower-quality or higher-cost options

What landlords should do

If you’re staying in the sector, review your portfolio to make sure you are compliant with current regulations, including EPC and safety standards. Consider restructuring your ownership to reduce tax burdens.

Plan ahead for regulatory changes and focus on maintaining good tenant relationships. These remain your best tools for success.

If you’re considering selling, do so with a clear plan: understand the tax implications, communicate with tenants, and seek professional advice.

Final thought

The private rented sector is evolving, and the landlords who adapt early and operate professionally will be best positioned to succeed. The market needs good landlords, and it’s worth considering what it will lose if more walk away.