New research suggests the Renters’ Rights Act could significantly reduce the supply of rental homes by preventing thousands of unsold properties from returning to the market.
Since 1 May, landlords using a Ground 1A notice to regain possession in order to sell a property must comply with a 12-month re-letting ban if the sale does not go ahead. This means that even if a buyer cannot be found, the property cannot be rented out again for a full year.
According to research by Hamptons, this rule could leave many landlords facing lengthy void periods in an already challenging housing market.
Unsold Properties Could Leave the Rental Market
Hamptons analysed landlord-owned properties listed for sale during 2025 and found that 51% failed to sell. The figure was even higher for flats, where 60% remained unsold.
Based on those figures, the agency estimates that if the current rules had been in force last year, between 80,000 and 100,000 rental homes would have been prevented from returning to the private rented sector for 12 months after an unsuccessful sale.
The findings suggest the new legislation could reduce the number of homes available to renters, particularly if sales continue to slow.
Fewer Former Rental Homes Going on the Market
The research also found that 9.2% of homes advertised for sale in June had previously been rented within the past five years. This is down from 11.3% recorded during the same period last year.
Hamptons believes this indicates that while the Renters’ Rights Act may have encouraged some landlords to sell, many exits from the sector had already taken place following earlier tax changes and higher mortgage costs.
The agency says June marked a shift in the market, with landlord sales declining rather than investor purchases increasing.
Landlord Purchases Now Outpace Sales
During June, landlords accounted for 10.2% of all property purchases, while former rental homes represented 9.2% of all properties listed for sale.
This marks the first time since 2019 that the proportion of homes being bought by landlords has exceeded the number being sold by them.
Hamptons notes that many landlords who intended to leave the sector may have already completed their sales in recent years, contributing to the fall in rental properties entering the sales market.
Slower Sales Increase the Risk for Landlords
The agency also warns that slower sales are making landlords more reluctant to serve notice on tenants before listing a property.
With homes taking longer to sell and some failing to achieve their asking price, landlords risk being left with vacant properties that cannot legally be re-let for 12 months if a sale falls through.
This issue is expected to be most noticeable in southern England, where higher property prices and lower rental yields continue to reduce investor demand.
Flats Face the Greatest Challenge
The research found that flats remain the property type most affected by landlord sales. Last year, they accounted for more than half of all rental properties placed on the market.
In June, almost a quarter (24.4%) of flats listed for sale had previously been rented, compared with just 7.8% of houses.
Hamptons says buyers have become increasingly cautious about purchasing flats due to rising service charges, resulting in longer selling times. On average, flats took 85 days to secure a buyer, compared with 59 days for houses.
The findings suggest that the combination of weaker sales conditions and the new re-letting restrictions could place additional pressure on landlords while further limiting the supply of rental homes available across Great Britain.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property