Landlords across the UK are increasingly divesting from the private rental sector, with new findings from LRG's Spring 2026 Lettings Report indicating a trend of reduced property portfolios. This move is largely attributed to the impending Renters' Reform Act, which is set to introduce significant changes to tenant-landlord relationships. The report suggests that while the Act aims to enhance tenant security and rights, it may inadvertently lead to a contraction of available rental properties, potentially making it harder and more expensive for individuals to find homes.
The Renters' Reform Act, which includes measures such as the abolition of 'no-fault' evictions (Section 21), is designed to provide greater stability for tenants. However, some landlords are reportedly viewing these changes as an increased burden and risk, prompting them to sell off properties. The LRG report highlights that this reduction in the supply of rental homes could place further pressure on an already competitive market, where demand consistently outstrips availability in many regions.
For prospective tenants, particularly those in high-demand urban centres, a shrinking pool of available properties could translate into fewer choices and higher rental prices. This development comes at a time when affordability is a significant concern for many households, with the cost of living crisis already impacting disposable incomes. The report's findings raise questions about the potential for unintended consequences of the legislation, where an attempt to improve tenant conditions could inadvertently worsen the overall rental landscape.
Existing homeowners and first-time buyers might also feel an indirect impact. If more landlords sell properties, some of these may enter the owner-occupier market, potentially slightly increasing supply for buyers. However, the primary effect is expected within the rental sector. The government's Help to Buy scheme, while not directly related to the rental market, has aimed to assist first-time buyers onto the property ladder, but the current climate for renters suggests that many will remain in the rental sector for longer, facing ongoing challenges.
The LRG report did not provide specific regional breakdowns of landlord divestment, but the general sentiment among property professionals indicates that areas with high rental demand, such as London and other major cities, could experience the most pronounced effects. The implications for the broader housing market remain to be seen, but the immediate concern centres on the availability and affordability of rental accommodation for millions of Britons.
Stamp duty land tax, which applies to property purchases, could see a marginal increase in revenue if more rental properties are sold to owner-occupiers or other investors. However, the report's focus is firmly on the supply-side dynamics of the rental market and the potential for a reduced number of options for those seeking to rent.
Source: LRG's Spring 2026 Lettings Report