The private rented sector in the UK is experiencing a significant contraction in available housing, with rental listings reaching record lows as more landlords, particularly smaller-scale owners, choose to sell their properties, according to new research from LandlordBuyer.
- Only around 35% of privately rented homes in the UK are subject to buy-to-let mortgages, meaning the majority of landlords may be mortgage-free or carrying minimal debt.
- This suggests fewer financial barriers to exit, allowing landlords to sell properties more quickly in response to market or regulatory changes.
- 34% of letting agents report a surge in landlords selling up, according to recent industry surveys.
- Smaller, independent landlords, often owning one or two properties, are leading the sell-off.
- Rental supply is shrinking faster than new homes can be delivered into the private rented sector.
While rising interest rates have dominated discussion around landlord exits, the data shows that borrowing pressure is not the main driver for many sellers.
- Mortgage-free landlords are less exposed to interest rate shocks
- Exit decisions are increasingly influenced by, regulatory complexity, the renters rights act 2025, taxation changes, compliance costs and administrative burden
Across many parts of the country, demand for rental homes continues to outstrip supply, placing upward pressure on rents and limiting options for tenants. The latest data suggests that this imbalance is being exacerbated by a sustained reduction in available rental stock, rather than a sudden spike in tenant demand, particularly in high-demand regions.
As Managing Director Jason Harris-Cohen of LandlordBuyer explains:
“This isn’t distress selling. Many landlords are financially secure and mortgage-free, but they’re choosing to exit because the sector no longer feels predictable or proportionate in terms of risk and reward. Over recent years, landlords have faced a steady layering of regulation, tax changes and compliance obligations, often introduced with limited clarity around long-term direction. For smaller landlords in particular, the administrative burden has grown to a point where the effort and uncertainty outweigh the returns. What we’re seeing is not a sudden reaction to interest rates, but a considered decision by landlords who feel the private rented sector is moving away from them. When experienced, responsible landlords leave, those homes don’t always return to the rental market. This reduces choice for tenants and puts further pressure on rents in already stretched areas. Without a more balanced approach that supports supply as well as tenant protection, the sector risks continued contraction, making affordability and access an even greater challenge for renters across the UK.’”
