The private rented sector in England has lost more than 350,000 homes since 2017, according to analysis by Savills for the National Residential Landlords Association. After decades of growth, the UK's buy-to-let market is contracting — and the people feeling it most are renters.
Why landlords are leaving
The exit has been driven by a combination of factors that hit simultaneously and compounded each other over the course of three to four years.
- Mortgage interest relief removed: From 2017, landlords lost the ability to deduct mortgage interest from rental income before calculating tax. Instead, they receive a 20% tax credit — a change that pushed many higher-rate taxpayers into making losses on paper even when cashflow was positive.
- Stamp Duty surcharge: Since 2016, landlords have paid an additional 3% Stamp Duty on buy-to-let purchases (raised to 5% in October 2024), sharply increasing acquisition costs.
- Rising mortgage rates: The rate rise cycle of 2022–2023 saw typical buy-to-let mortgage rates increase from under 2% to over 5%. Many landlords who'd remortgaged onto low fixed rates found themselves unable to make the numbers work on renewal.
- Regulatory compliance costs: EPC requirements, the Renters' Rights Act, selective licensing schemes, and mandatory electrical inspection reports have all increased the cost and complexity of being a landlord.
- Capital gains opportunity: With property values elevated after years of growth, many landlords chose to sell while gains were still strong.
| Factor | Impact | When it hit hardest |
|---|---|---|
| Mortgage interest relief removal | Profits fell for higher-rate payers | 2017–2020 (phased) |
| Buy-to-let mortgage rate rises | Cashflow turned negative for many | 2022–2023 |
| Stamp Duty surcharge increase | Entry costs rose sharply | Oct 2024 |
| Renters' Rights Act implementation | New tenancy rules started; later phases still coming | 2026 onward |
| EPC C requirement proposals | Retrofit costs deterred continued letting | 2023–2025 |
The impact on the supply of rental homes
Supply remains tight by historic standards, though advertised stock has improved from the worst post-pandemic shortage. Rightmove reported in April 2026 that available homes to rent were 3% higher than a year earlier, while more landlords were cutting asking prices before agreeing a let.
The consequence is still straightforward: renters face a smaller choice set than they did before the supply crunch. The ONS put the average UK private rent at £1,383 per month in May 2026, with London averaging £2,294. Advertised asking rents are often higher than the stock average, especially in London.
Not all landlords are leaving
Portfolio landlords — those with five or more properties — are generally staying or expanding. The exits are concentrated among accidental landlords (people who let a property they couldn't sell) and small-scale investors with one or two buy-to-lets who bought at lower rates and can't absorb higher mortgage costs. The market is consolidating, not collapsing.
What this means for tenants
Fewer suitable homes means more competition for the properties that do fit. Tenants who don't tick every box on a standard referencing template can still be screened out quickly, even if the market is no longer at the absolute peak of 2022–2024 pressure.
The practical result: if you have a non-standard situation — deposit issues, self-employment, no guarantor, adverse credit — your chances of being progressed through a competitive standard letting agent are lower than they've ever been. The supply crunch amplifies every barrier.
What this means for landlords who stay
The market conditions are the strongest argument for staying in property. Rental demand is at historic highs, void periods are minimal, and yields in many regional cities have risen as rents outpaced prices. Landlords who've restructured their finances — remortgaged onto five-year fixes, moved into a limited company structure, or bought in cash — are reporting strong returns.
For landlords who own free of mortgage, the current environment is close to optimal: high demand, high rents, limited void risk. The challenge is regulatory compliance and finding good tenants quickly, which is where agent relationships become more valuable.