​​​​​​​Landlord sales slow as Renters' Rights Act and re-letting ban raise exit costs

The rate at which landlords are selling up has fallen back following a spike earlier this year, according to analysis of Connells Group data by Hamptons.

Across Britain, 9.2% of homes listed for sale in June had previously been available to rent within the past five years, down from 11.3% at the same point in 2025. The figure is also lower than levels recorded earlier in 2026 and in 2021, when the first cohort of landlords lost access to full mortgage interest tax relief. 

Hamptons concluded that while the Renters' Rights Act, which came into force on 1 May, may have accelerated some decisions to sell, the primary drivers of landlord exits have been earlier tax changes and the prolonged period of higher mortgage rates.

June represented a shift in the rental supply picture. Landlords accounted for 10.2% of all purchases that month, marginally above the 9.2% share of homes listed for sale that had previously been rented. It was the first time since 2019 that the proportion of homes bought by landlords exceeded the proportion being sold by them.

Factors behind the slowdown

Hamptons identified three reasons for the reduced pace of disposals.

First, a significant number of landlords who intended to exit have already done so. Tax changes introduced from 2016, rising borrowing costs from 2022, and the subsequent implementation of the Renters' Rights Act have collectively removed many motivated sellers from the market. The private rented sector in England has not kept pace with broader housing stock growth: the number of rental homes has remained at approximately 4.8 million over the past decade, while the overall housing stock has grown by around two million units, with most of the additional supply absorbed into owner-occupation.

"The Renters' Rights Act has been a long time coming, and most landlords who wanted to leave the sector because of it have probably already done so," said Aneisha Beveridge (pictured right), head of research at Hamptons. "While the new rules may have encouraged some landlords to sell, the bigger shift has come from years of tax changes and higher mortgage costs, which have gradually reduced the number of landlords in the market."

Second, the cost of a failed sale has risen materially. Under the Renters' Rights Act, landlords who serve a Ground 1A notice to sell — the formal mechanism for regaining possession of a rental property ahead of a sale — face a mandatory 12-month ban on re-letting if the sale falls through. Hamptons estimated that, had this rule been in operation during 2025, between 80,000 and 100,000 unsold rental properties would have been barred from returning to the rental market for a year. In 2025, 51% of homes listed for sale by landlords failed to sell, rising to 60% among flats.

Third, a more sluggish sales market has made landlords more cautious about initiating the process. Flats have been disproportionately affected: in June, the average flat took 85 days to go under offer, compared with 59 days for a house. Across Great Britain, 24.4% of flats listed for sale in June had previously been rented, against 7.8% of houses. Rising service charges have added to the wariness of both investors and owner-occupiers towards leasehold properties.

"A tougher sales market and the introduction of a 12-month re-letting ban mean selling has become a more complicated proposition for landlords," Beveridge said. "For many, the prospect of being left with an empty property that can't easily return to the rental market has made holding on to an investment look more attractive.

"For those landlords who have chosen to sit tight, there are signs that their decision may start to pay off. Yields have improved over the last couple of years as rents have risen faster than house prices, giving investors more headroom to absorb higher borrowing costs." 

Regional variation

Landlord disposals remain most concentrated in London and the South of England, where higher prices, lower yields, and elevated mortgage costs have compressed investor returns most severely. In London, one in five (20.3%) homes listed for sale in June had previously been let within the past five years. The figure for the South East was 9.5%.

The largest year-on-year falls in landlord sales were recorded in Northern markets, where stronger yields have made buy-to-let more resilient and exit pressure correspondingly lower.

Rental growth accelerating

Average rents on newly let homes across Great Britain reached £1,392 per month in June, up 1.6% year-on-year — the strongest rate of annual growth for new lets in 13 months.

"Rental growth is picking up again, with rents on newly let homes rising at their fastest pace in more than a year," Beveridge said. "While challenges undoubtedly remain, conditions for landlords arguably look better than they did 12 months ago."

The recovery has been driven by Northern regions, with the North East recording the fastest growth at 4.3% annually, bringing the average newly agreed rent in the region to £859 per month. Rental growth in Inner London continued to slow, edging down to 0.4% in June from 1.6% in May, though Outer London returned to positive annual growth for the first time in a year, with rents up 1.9%.

Across the whole rental market, including ongoing tenancies, rents were 2.2% higher year-on-year. For existing tenants whose rent was raised in June, the average increase was 5.4%. Scotland recorded the highest uplifts for sitting tenants, averaging 8%, followed by the North of England and the Midlands.

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