A leading landlord association has warned the trend could push more tenants toward homelessness as the supply of rental homes continues to shrink.
A new government survey shows that landlords are scaling back or exiting the private rented sector, citing law changes and rising tax burdens as the driving factors.
Higher than three-quarters of medium and large-scale property owners pointed to these pressures when explaining their decision to reduce activity.
Analysis of the English Private Landlord Survey (EPLS) found that half of large business landlords intend to cut back or sell off their entire portfolios — a higher proportion than any other group.
The survey also found that over a third of landlords (36%) required rent in advance.
The private rented sector is largely made up of small-scale landlords: 45% of those surveyed owned just one property. By contrast, only 17% held five or more homes, though this group accounted for nearly half of all tenancies (49%).
Conducted in April and May 2024, ahead of the General Election, the survey reflects concerns over the Renters (Reform) Bill — measures that have since been carried forward into the newly enacted Renters’ Rights Act.
Figures released in July showed that households in the private rented sector facing homelessness because of landlord withdrawals had risen by nearly 20% since the end of last year.
The analysis stressed the importance of keeping responsible landlords engaged in the sector to prevent further strain on housing supply.
The Government’s latest report, compiled with input from Property Redress, drew this response from its Head of Redress said “The latest EPLS report shows a sector under strain, with many landlords looking to leave, but in my view this also marks the beginning of a wider professionalisation of the private rented sector.
“That transition will not be painless. We will inevitably lose more landlords, and that is concerning because it affects the stability of the market, reduces supply, and puts upward pressure on rents for tenants.
“However, we are now moving forward with more certainty. Landlords have a clearer understanding of the fiscal and regulatory landscape ahead, and we must prepare for a period of adjustment.
“This is a resilient sector. In the long term, I believe we will see the emergence of a sharper, more professional landlord cohort. Those entering or staying in the market will do so with a clear understanding of what is expected of them.
“While some landlords will understandably exit, others will adapt, and in time, I expect renewed interest from investors who see ways to make the new environment work for them.”