Landlords are being deterred from selling their rental properties due to new regulations under the Renters' Rights Act, which introduce a 12-month ban on re-letting a property after an eviction using a Ground 1A notice. This measure is intended to protect tenants but has sparked concerns among landlords who claim it leaves them vulnerable financially. Mark Dawson, managing director of AST Assistance, warns that if a sale falls through, a property could remain empty for over a year, forcing the landlord to cover mortgage payments and other expenses without any rental income.
The impact is already being felt, with recent analysis by Hamptons revealing that landlords accounted for 10.2% of property purchases in June 2026 – surpassing the 9.2% of homes listed for sale that were previously rented. This marks a significant shift since 2019 and has left some industry experts questioning whether the new regulations are having an unintended consequence on the private rented sector.
AST Assistance's Mark Dawson notes that over half (51%) of rental property sales failed to finalise in 2025, making the risk even more pronounced. He suggests that landlords need a robust sales strategy to mitigate this risk, potentially targeting buyers who have already secured an accepted offer on their own property or first-time buyers with pre-approved mortgages.
The scenario is causing concern for both prospective buyers and renters, as it could lead to properties sitting empty for extended periods. Dawson warns that this would ultimately reduce the availability of homes in the private rented sector – a situation he believes was not anticipated by policymakers when introducing the Renters' Rights Act.
Mortgage rates continue to play a significant role in shaping buyer affordability and landlord investment decisions, with the Bank of England's base rate currently at 5.25%. The stabilisation of mortgage rates from their 2023 peaks has offered some respite for buyers, but higher costs and the tapering off of schemes like Help to Buy are still affecting first-time buyers.