Many private landlords are considering leaving the rental market, with a significant number planning to sell properties in the coming years. A survey by Property118 found that around 40% of landlords intend to sell one or more properties within the next three years, and 27% of the 2,096 landlords surveyed plan to exit the market completely.
Experts suggest that higher taxes, mortgage interest restrictions, increased regulation, and changes to tenant protections, including the gradual removal of Section 21 powers, have made being a landlord more costly and complex. Isabella Galliers-Pratt, senior investment director at Rathbones, noted that the landscape has shifted, favouring larger, professional operators better equipped to absorb these costs.
For landlords nearing retirement, the decision to sell often involves assessing whether property remains the most efficient way to generate income. Matthew Beck, a chartered financial planner, highlighted that the "hassle and cost of being a landlord is increasing, and in many areas yields are falling." He advises landlords to calculate their real yield after tax, fees, and maintenance to compare it with alternative investments.
Landlords considering selling should also factor in timing, as rental income tax rates are set to rise by two percentage points across the board in April 2027. Capital gains tax on residential property is charged at 18% within the basic rate band and 24% above it, with an annual exempt amount of £3,000 per person.