The findings reveal that the trend of landlords leaving the market shows no signs of slowing. Over the past year, 35% of landlords have either completed a sale 19% or made active attempts to sell their rental properties posing 16%.
While 44% of those exiting the market sold a single property, a notable 14% removed five or more homes from the rental pool—a serious risk to housing availability and further tightening supply.
With the Renters’ Rights Bill on the verge of becoming law, a significant portion of landlords are scaling back their property portfolios in response.
Four out of five landlords who are selling or reducing holdings cite the legislation as a driving factor, with the planned removal of Section 21—commonly known as “no fault” evictions—emerging as the most contentious change. A full 80% believe it will negatively affect the private rented sector.
This wave of landlord departures is intensifying pressure on renters, many of whom are struggling to secure affordable housing. Nearly half of tenants 48% say they’ve had difficulty finding a suitable property in the past year.
Letting agents are seeing the effects firsthand: 67% report a surge in tenant demand, while 30% say the supply of available rental homes has dropped—further fuelling competition and rising costs.
In a bid to secure rental homes, 40% of tenants report paying more than the standard one-month deposit to outpace competing applicants. However, this practice is set to be outlawed under the forthcoming Renters’ Rights Bill—potentially limiting flexibility for renters who rely on upfront payments to strengthen their applications.
With over two in five renters saying they’re unlikely to purchase a home within the next five years, demand in the private rental sector is expected to remain high, further straining supply.
The Bill’s new restrictions on rent increases may also have unintended consequences. By banning rent overbidding, the legislation could fuel a rise in “gazundering”—a tactic where landlords list properties at inflated prices to allow room for negotiation. One in five landlords say they plan to adopt this approach. If widespread, gazundering could distort rental benchmarks and accelerate price hikes as landlords and agents attempt to align advertised rents with local market trends.
Although 40% of landlords report keeping rents steady over the past year, upcoming changes under the Renters’ Rights Bill—limiting rent increases to once annually via a Section 13 notice—may prompt more landlords to raise rents routinely to avoid missing their opportunity.
Tenants will gain the right to challenge rent hikes, and while most 76% say they’d only appeal if they felt the increase was unfair, a notable 22% say they would contest any rise regardless. This could lead to a surge in cases at the First Tier Tribunal, potentially causing delays in rulings and leaving landlords—particularly those without rent protection insurance—financially exposed during the process.
For renters already under strain, further rent increases could be devastating. Currently, 42% of tenants are in ‘rent poverty,’ spending 40% or more of their gross income on housing. While this marks a slight improvement from last year’s figure of 48%, the burden remains severe for low-income households. Among tenants earning £20,000 or less annually, a staggering 73% fall into rent poverty. One in three say that even a modest 3% rent rise would tip them into financial hardship.
Rising affordability challenges are beginning to show in rent arrears, with 29% of letting agents reporting an increase over the past year. Among landlords, the figure is even higher—42% say arrears have worsened.
But financial strain isn’t limited to tenants. The report highlights a looming revenue gap for agencies as fixed-term tenancies face abolition under the Renters’ Rights Bill. Currently, renewals make up 27% of agent income on average, climbing to 37% for those operating in London.
With fixed-term contracts set to disappear, many agencies will need to rethink their business models to avoid a significant financial shortfall—raising concerns about a potential revenue crisis across the sector.
In response, agents are turning to technology to streamline operations. The report shows growing adoption of AI tools, particularly among larger firms looking to boost efficiency and adapt to the changing landscape.
Virtually half of letting agencies - 47% -say they’ve begun exploring AI tools, and 22% have integrated them into their daily operations. Yet only a small fraction—just 7%—report that AI has meaningfully improved workflows or enhanced the client experience.
Amid mounting challenges across the rental market, landlord confidence remains low. Just 13% currently express optimism about the sector’s future.
Letting agents, however, are showing signs of renewed hope. For the first time in five years, agent optimism is on the rise: 20% describe themselves as “somewhat optimistic,” and 7% say they’re “very optimistic”—a modest but notable 4% increase in positive sentiment compared to last year.
The spokesperson for the industry body, said: “This year’s report, now in its eight year and our most in-depth to date, reveals a market under intense and mounting pressure. Landlords are deeply disillusioned, with the Renters’ Rights Bill hastening their decision to exit the market. And agents are facing tough headwinds and escalating pressure on their bottom line, making finding new revenue streams and routes to efficiency has become an absolute imperative.
“One of the most worrying areas is tenants. Already struggling with rental costs and a shortage of properties, we believe that the Renters’ Rights Bill could unwittingly ramp up the pressures they’re facing. From blocking tenants from paying in advance, incentivising landlords to overprice properties, and driving more to sell-up, a bill designed to protect tenants could inadvertently be about to pull the rug out from under them. Renters’ Rights could very quickly become renters wronged.”