UK Landlord Exodus To Speed Up In 2026
The UK rental property market is undergoing significant changes, with a substantial number of landlords expected to leave the market in 2026 due to challenges such as high inflation, new regulations, and increased taxes. In 2025, approximately 93,000…
The UK rental property market is undergoing significant changes, with a substantial number of landlords expected to leave the market in 2026 due to challenges such as high inflation, new regulations, and increased taxes. In 2025, approximately 93,000 buy-to-let landlords exited the market, indicating a trend that is anticipated to accelerate.
Landlords Plan To Downsize Or Exit Completely
Data from a recent English Private Landlord Survey shows:
31% of landlords plan to reduce the size of their portfolio 16% are considering selling all their rental properties within the next two years
These changes have been driven by the introduction of the Renters’ Rights Act and increased landlord taxes, impacting the desirability of owning rental properties in the UK.
Renters’ Rights Act Puts Power Back In The Hands Of Renters
The Renters’ Rights Act, which recently came into effect, abolished Section 21 ‘no-fault’ evictions, complicating the process for landlords to remove tenants. This change, coupled with stricter local authority guidelines such as EPC rules and licensing, has increased costs and complexities for landlords.
In 2025, approximately 93,000 buy-to-let landlords exited the market, indicating a trend that is anticipated to accelerate.
Many landlords now prefer selling properties with tenants in place to avoid lengthy eviction processes.
The autumn budget introduced higher taxes on rental income, effective from April 2027, with new property income tax brackets:
22% basic rate (up from 20%) 42% higher rate (up from 40%) 47% additional rate (up from 45%)
These tax changes, combined with other costs like the mansion tax on properties over £2 million, have made property investment less attractive. The average rental yield in the UK is 5.8%, leading many to seek more stable investment opportunities.
The anticipated exit of private landlords is expected to reduce the supply of private rentals, increasing pressure on tenants in areas such as London, Bristol, and Manchester. Rent inflation may rise further if the trend continues without adequate replacement of exiting landlords.
The reforms intended to support renters' rights have introduced challenges for landlords, who face tighter regulations and higher taxes, marking 2026 as a transformative year for the rental sector.
Based on reporting by techround.co.uk.