The government has recently revised its position on the issue of landlords leaving the private rented sector (PRS), acknowledging that it does not hold precise data on how many landlords have exited the market. This marks a notable shift from earlier statements denying a landlord exodus.

Government admits lack of data on landlord exits

Housing Minister Matthew Pennycook has confirmed in response to a written parliamentary question that the Department does not possess information on the number of landlords who have left the PRS since 2020. Labour MP Dan Carden had asked for figures on landlord exits each year since 2020, but Mr Pennycook stated: “My Department does not hold the information requested.”

Instead, the government relies on HMRC data showing the number of landlords declaring rental income in England has remained broadly stable since 2019-20. According to the latest figures, 2.86 million unincorporated landlords declared rental income in 2023-24.

Previous denials of a landlord exodus

Until recently, Mr Pennycook had consistently denied that a landlord exodus was occurring. At the Committee stage of the Renters’ Rights Bill, he said: “We don’t want an exodus of landlords from the sector, but I’ve seen absolutely no evidence of that. I think this is a threat that has been bandied about for many, many years now.”

In a written response last year, he reiterated this position, citing the English Private Landlord Survey 2024. He noted that 45% of landlords owned only one property, a figure similar to previous years, and that the sector’s size had remained broadly stable since 2013-14 despite ongoing government reforms.

Evidence suggests landlords are reducing portfolios

However, the same English Private Landlord Survey 2024 reveals a more complex picture. It shows that a significant proportion of landlords are planning to reduce their portfolios, citing recent and forthcoming tax and legislative changes as key reasons. Specifically, 66% of landlords intending to decrease their holdings pointed to recent changes, while 44% mentioned upcoming legislation.

The survey highlights that in 2024, 31% of landlords planned to reduce the size of their portfolio within two years, including 16% who intended to sell all their properties. This indicates a trend towards contraction in landlord numbers and holdings, despite official claims of sector stability.

Industry warnings of a landlord exodus

These findings align with warnings from industry experts and professional bodies. The Royal Institution of Chartered Surveyors (RICS) has reported that landlords are leaving the PRS at the fastest rate since the early stages of the pandemic. Letting agents nationwide have also observed increased landlord anxiety and exits ahead of the Renters’ Rights Act reforms.

Such developments suggest that while official data may not yet fully capture the scale of change, the sector is experiencing significant shifts that could impact rental supply and market dynamics.

What this means for landlords

For landlords, the evolving landscape underscores the importance of staying informed about legislative changes and their potential impact on rental portfolios. The trend towards portfolio reduction may reflect concerns about profitability and regulatory burdens, signalling a need for careful portfolio management and strategic planning.

Letting agents and property managers should also be aware of these dynamics, as they may affect landlord engagement and the availability of rental properties in the near future.

Source: Based on reporting from Property118

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