Shock survey says another 5% of private rental stock could go

Shock survey says another 5% of private rental stock could go

A new survey suggests that England’s private rental sector could shrink further this year, with around 5% of rental homes potentially disappearing by the end of 2026.

Research from specialist lender Pepper Money estimates that roughly 220,000 households may exit the private rented sector. The findings highlight a growing trend of landlords choosing to leave the market—particularly those with smaller portfolios.

Landlords who own just one property appear most likely to sell up, being twice as likely to exit compared to those with multiple properties. This points to a shift in the structure of the sector, where larger, more established landlords are increasingly dominant.

One of the main drivers behind this potential exodus is the upcoming Renters’ Rights Act, due to come into force next month. The legislation introduces significant changes to tenancy rules, notice periods, and property management requirements. According to the survey, these reforms alone could lead to over 65,000 households leaving the rental market by year-end.

Industry experts warn that these regulatory changes are adding to existing financial pressures. Over recent years, tax changes, higher borrowing costs, and tighter regulations have already reduced profitability for many landlords, making buy-to-let investments less attractive.

Pepper Money’s sales director, Paul Adams, noted that while improving tenant protections is important, there could be unintended consequences. A reduction in rental supply may push up rents or limit availability at a time when the market is already under strain.

The survey also highlights a lack of new investment entering the sector. Only a small proportion of landlords—around 5%—have purchased additional rental properties in the past year. At the same time, construction of new build-to-rent homes remains relatively low, meaning departing landlords are unlikely to be replaced quickly.

As a result, the private rented sector could see a net decline in available homes during 2026.

Overall, the data suggests a gradual transformation of the market. Smaller, individual landlords are stepping away, while larger operators—better equipped to handle rising costs and regulatory demands—are becoming more prominent.