Third of landlords want out despite 6% rent rise in major UK cities

Third of landlords want out despite 6% rent rise in major UK cities

Rents have risen 6% across the UK’s largest towns and cities since the Renters Rights Act took effect, yet around 35% of private landlords have sold or tried to sell their properties in the past year, shrinking the sector significantly.

Asking rents across the UK’s 21 largest towns and cities have increased by 6% in the three months following the implementation of the Renters Rights Act (RRA). This rise has been confirmed by a study from property management firm Ringley Group, which noted a 5.6% increase in the first two months after the Act came into force, with rent growth accelerating thereafter.

Despite this upward pressure on rents, the private rented sector (PRS) is contracting. An estimated 35% of private landlords have either sold or attempted to sell their rental properties within the last twelve months. Over the three years leading up to May 2025, the English PRS is believed to have shrunk by approximately 354,000 homes. This contraction is occurring even as demand remains strong, partly due to weak home ownership affordability, which is causing households to rent for longer periods.

Ringley Group’s analysis of market dynamics and investor response

The Ringley Group’s wider survey highlights several factors influencing the rental market. Weak affordability for home ownership is a key driver keeping demand high, even though the pace of rent increases has eased somewhat from its peak in 2024. This sustained demand contrasts with the supply side, where the PRS is shrinking as many smaller landlords exit the market.

Institutional investors, particularly those involved in Build to Rent (BTR) developments, are responding to these conditions selectively. BTR has grown from a negligible presence 15 years ago to now account for 10% of all new homes built. These developments are constructed 30% to 60% faster than conventional housing schemes. However, delivery remains limited to around 17,000 homes annually, with a maximum potential of about 30,000 homes per year, which is insufficient to fill the gap left by departing smaller landlords.

Ringley Group has called on the Chancellor to take action in the upcoming Budget, scheduled for October 28. They advocate for the restoration of targeted Stamp Duty Land Tax (SDLT) relief for the rental sector, alongside other measures aimed at improving the financial viability of rental investments and restoring confidence among landlords and investors.

Context of the Renters Rights Act and its unintended consequences

The Renters Rights Act, which came into force less than six months ago, was designed to enhance tenant protections and improve rental conditions. However, early indications suggest that the legislation has had some unintended effects. The sharp rise in asking rents is one such consequence, as landlords seek to offset increased costs and regulatory burdens.

Moreover, the Act appears to be accelerating the departure of smaller landlords from the market. This trend is concerning given the already tight supply of rental properties and the challenges faced in delivering new homes. The erosion of the PRS supply risks exacerbating affordability issues for tenants and increasing pressure on the housing market overall.

While institutional investors are stepping in to some extent, their scale of delivery is not enough to compensate for the loss of smaller landlords. This imbalance highlights the need for policy measures that support the rental sector’s sustainability and encourage investment.

Practical implications for landlords and letting agents

For landlords, the current environment presents significant challenges. Rising rents may improve income in the short term, but the increased regulatory complexity and market uncertainty are prompting many to reconsider their involvement in the PRS. Those managing small portfolios may find the administrative and compliance demands increasingly onerous, especially alongside financial pressures such as higher borrowing costs and tax changes.

Letting agents are also affected as the market adjusts. With fewer landlords and properties available, competition for stock intensifies, and agents may need to adapt their services to support landlords navigating the evolving regulatory framework. The need to maintain compliance with the Renters Rights Act and other legislative requirements adds to operational complexity.

Landlords should review their portfolios carefully, considering the long-term viability of their investments in light of rising costs and regulatory changes. Maintaining up-to-date records, ensuring compliance with safety and tenancy laws, and monitoring market conditions will be essential. Agents can play a key role in advising landlords and helping them manage these risks.

Uncertainties and what to watch going forward

Several uncertainties remain that could influence the PRS’s future trajectory. The government’s response in the forthcoming Budget, particularly regarding tax reliefs and support for the rental sector, will be closely watched. Changes in policy could either stem the tide of landlord exits or accelerate it further.

Additionally, the longer-term impact of the Renters Rights Act on landlord behaviour and rental supply is not yet fully clear. While rent rises have been sharp, the sustainability of these increases depends on broader economic factors, including inflation, wage growth, and borrowing costs.

There is also uncertainty about how institutional investment in Build to Rent will evolve and whether it can scale sufficiently to meet demand. The balance between small landlords and larger investors will shape the market’s structure and availability of rental homes.

What landlords should consider now

• Review rental income and expenditure carefully to assess the impact of rising rents and costs.
• Ensure all tenancy agreements and property compliance documentation meet current legal requirements, including those introduced by the Renters Rights Act.
• Stay informed about potential changes in tax reliefs and government support announced in the upcoming Budget.
• Consider the long-term sustainability of your rental portfolio and whether adjustments are needed to maintain viability.
• Engage with letting agents and professional bodies to access advice and support on managing regulatory changes and market conditions.

Supporting landlords through regulatory change with TLA

The Landlord Association (TLA) offers members practical resources to help manage compliance with evolving rental regulations. Through membership, landlords and letting agents can access up-to-date guidance on tenancy law, safety obligations, and deposit handling. TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, supports landlords in organising property records, managing rental documents, and recording key actions related to compliance. This tool is designed to assist with the administrative demands intensified by recent legislation such as the Renters Rights Act.

By exploring TLA membership and ORBIT BETA access, landlords can better prepare for regulatory developments, maintain evidence of compliance, and streamline property management tasks. Staying organised and informed is increasingly important as the rental sector adjusts to new challenges and government policies.

Looking ahead, the sector will need continued engagement with policymakers to ensure rental housing remains viable and accessible. Landlords and agents should monitor announcements closely and adapt their strategies accordingly.

Sources: Landlord Today