New research reveals significant uncertainty among landlords following the introduction of the Renters’ Rights Act on 1 May 2026. The legislation, which abolishes Section 21 and aims to enhance tenant protections, is prompting many landlords—especially smaller ones—to reconsider their involvement in the private rental sector.

Landlord intentions amid regulatory change

Data from property consultancy Allsop indicates that 41% of landlords are unlikely or very unlikely to continue letting properties under the new regulatory framework. This figure rises to 51% among landlords who own a single property, highlighting a particular vulnerability among smaller operators.

Nearly a third of landlords (30.3%) plan to sell all their rental homes, while an additional 18% intend to reduce their portfolios. Combined, this means almost half (48.4%) of landlords are considering either exiting or significantly scaling back their presence in the rental market.

Financial pressures and market consolidation

In response to increased compliance costs associated with the Renters’ Rights Act, over 70% of landlords say they will raise rents. Meanwhile, 23.2% are considering selling properties to manage these financial pressures. This trend points to a consolidation within the sector, where smaller landlords are exiting and larger, institutional investors are maintaining or expanding their holdings.

Seb Verity, head of research at Allsop, explains: “England’s private rental sector isn’t simply shrinking, it’s also consolidating. Smaller, often accidental landlords are exiting while larger, more institutional operators are selectively holding or growing.”

Implications of the Renters’ Rights Act

The Act is designed to professionalise the private rental sector and improve standards, with greater security of tenure and clearer mechanisms for tenant redress. Mr Verity acknowledges these aims as positive: “Greater security of tenure and clearer redress mechanisms are a good thing.”

However, he also highlights the cumulative challenges faced by landlords: “The cumulative weight of regulatory change, layered on top of mortgage rate rises, tax reform and EPC obligations, is testing the resolve of a large cohort of smaller landlords, many of whom provide well-managed, good quality homes for families and many of whom seem no longer to feel they’ll be able to continue doing so.”

He warns that this could lead to increased rental costs at a time when housing supply remains insufficient to meet demand.

Future outlook for the rental sector

Mr Verity reflects on the broader impact of the legislation: “The Renters’ Rights Act represents the latest transformation of England’s housing stock. Whether that structural shift ultimately serves tenants well remains an open question.”

He emphasises the need for a parallel strategy to increase housing supply and affordability, cautioning that without this, the Act may exacerbate existing housing challenges rather than resolve them.

The research also shows a divergence in landlord behaviour based on portfolio size. While 44% of landlords with 26 or more properties plan to maintain or increase their investments, only 25% of single-property landlords intend to do the same, underscoring the sector’s ongoing consolidation.

What this means for landlords

For smaller landlords, the Renters’ Rights Act presents a complex challenge. The increased regulatory burden, combined with financial pressures, is prompting many to reconsider their role in the market. Those who continue may face higher compliance costs and the need to adjust rental pricing accordingly.

Larger landlords and institutional investors appear better positioned to adapt, potentially leading to a more professionalised but less diverse rental sector. This shift could have implications for tenant choice and rental affordability in the long term.

Source: Based on reporting from Property118

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