The UK government has recently altered its position regarding concerns over a “landlord exodus” from the private rented sector (PRS), now admitting that it lacks precise data on how many landlords have actually left the market. For years, the issue has sparked debate, with Housing Minister Matthew Pennycook previously asserting that there was no evidence of mass departures and pointing out that the PRS had doubled in size since the early 2000s. However, in response to a written parliamentary question from Labour MP Dan Carden, Mr Pennycook acknowledged that his department does not hold detailed figures on landlord exits, leaving a gap in official knowledge despite ongoing concerns in the sector.
HMRC data reveals that 2.86 million unincorporated landlords declared rental income in 2023–24, suggesting a degree of overall stability in the number of active landlords. Yet, these figures do not provide insight into whether landlords are reducing the number of properties they manage, an increasingly important factor given recent regulatory changes and rising costs. Previously, Mr Pennycook had strongly denied a landlord exodus during parliamentary discussions. Speaking at the Committee stage of the Renters’ Rights Bill, he said: “We don’t want an exodus of landlords from the sector, but I’ve seen absolutely no evidence of that. I think this is a threat that has been bandied about for many, many years now.” He reiterated similar points last year, noting that the proportion of landlords with only one property had remained largely consistent between 2018 and 2024, and that the overall size of the sector had not significantly contracted.
Despite these reassurances, survey data presents a different picture. The English Private Landlord Survey 2024 reveals that many landlords, regardless of the number of properties they own, are planning to downsize their portfolios in response to recent and upcoming legislative changes. Among landlords intending to reduce their holdings, 66% cited recent tax and legislative reforms as the primary reason, while 44% pointed to forthcoming changes. Overall, 31% of landlords reported plans to decrease the size of their portfolios over the next two years, including 16% planning to sell all their properties entirely.
Industry observers have long warned of a growing exit of landlords from the PRS. RICS has noted that landlords are leaving the sector at the fastest rate since the early stages of the pandemic. Letting agents across the country have reported heightened anxiety among landlords, with many selling off properties or stepping back from the market in anticipation of the changes brought about by the Renters’ Rights Act. This evidence suggests that, while the number of landlords may appear stable at a glance, the actual behaviour of property owners indicates a notable contraction in the number of available rental properties.
The apparent discrepancy between official figures and survey data highlights the complexities of interpreting trends within the PRS. While headline statistics point to stability, underlying behaviour shows that legislative pressures, tax changes, and regulatory uncertainty are influencing landlord decisions, particularly for those managing smaller portfolios. For renters and policymakers alike, this trend has important implications: a shrinking supply of rental properties could affect rental prices, availability, and the overall health of the sector.
Ultimately, the shift in the government’s stance underscores the challenges of accurately tracking and responding to changes in the PRS. As landlords reassess their positions in light of evolving regulations, the market may see a gradual reduction in property holdings, potentially reshaping the landscape for tenants and landlords alike. Staying informed about these trends, and understanding the factors driving landlord decisions, will be crucial for both renters seeking housing and stakeholders monitoring the sector’s future.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property