Data suggests landlord exits from the buy-to-let market remain limited despite regulatory changes and rising costs, with industry figures questioning whether recent headlines reflect the sector’s reality.
According to a poll by software provider Alto, 34% of letting agents reported a large increase in landlords selling properties, with smaller landlords owning one or two properties comprising the majority of exits. However, recent data from Dwelly indicates that only 1.04% of landlords left the market in the last year.
“The word ‘exodus’, so often bandied around, does not seem appropriate; a 1% dip hardly points to a dramatic collapse,” said Tim Parkes, CEO of RAW Capital. “Instead, it reflects a sector that naturally ebbs and flows, with some investors exiting while others enter, restructure or diversify.”
Regulatory changes and market adjustment
The Renters’ Rights Act, which comes into force on 1 May 2026, will abolish section 21 ‘no-fault’ evictions, convert all assured tenancies to periodic agreements, and limit rent increases to once per year. According to Pegasus Insights’ Landlord Trends Q3 2025 report, 73% of landlords believe the Act will negatively impact their lettings activity, while 71% said they plan to increase rent to absorb new costs.
Sean Hooker, head of redress at Property Redress, noted that “much of the discussion around landlords leaving the sector is based on perception rather than hard evidence. Some landlords are undoubtedly choosing to exit, but in many cases, this reflects natural portfolio decisions rather than a single trigger.”
Bob Singh, founder of Chess Mortgages, traced current challenges to changes announced in July 2015, when then-chancellor George Osborne proposed restricting tax relief on mortgage interest for buy-to-let landlords. “Landlords who are earning above the basic rate band of tax suddenly found themselves at a disadvantage, being able to claim only 20% of the finance costs against the gross rental income,” Singh said.
Market data and tenant concerns
TwentyEA data revealed that in Q1 2025, 15.6% of new property sales instructions were previously rented properties, rising from 9.8% a year earlier, with just 2.9% of those homes subsequently re-let. Meanwhile, Savills reported that the UK private rented sector fell £48bn in value in 2025, the biggest drop this century.
Housing Hand’s Understanding Renters in 2025 report found that tenants in its focus group expressed concerns about landlords increasing rent or selling properties following the Renters’ Rights Act. The potential for reduced rental stock and higher rents could make it more difficult for tenants to save for deposits to purchase their own homes.
However, Hooker noted that “for many landlords, the sector still makes financial sense, but it requires taking a realistic view of future compliance requirements and ensuring their portfolio is structured in a way that works for them. The fundamentals of the rental market remain strong.”
Parkes added that “the demand for rental housing remains strong and, for landlords with clear long-term strategies, there is still a compelling long-term case for residential property.”
Sector outlook
While property software providers prepare platforms for the new regulatory environment, industry observers suggest the sector is experiencing adjustment rather than collapse. Hooker stated that “we are also seeing new investors entering the market with a clearer understanding of regulatory requirements.”
The buy-to-let market faces continued pressure from higher borrowing costs, tax changes, and regulatory requirements, but current exit rates suggest many landlords are adapting their strategies rather than leaving the sector entirely. The coming months will reveal whether the implementation of the Renters’ Rights Act accelerates departures or whether the market stabilises as investors adjust to the new framework.