According to an analysis by LandlordBuyer, the supply of rental properties is in crisis as supply falls to record levels as landlords leave the market.
Just over a third (35%) of rental properties have a buy-to-let mortgage, meaning most landlords do not have a mortgage. This implies an easier financial hurdle when it comes to sales, meaning landlords can respond quickly to market conditions, according to LandlordBuyer.
LandlordBuyer cited recent industry surveys showing that 34% of letting agents have seen an increase in the number of landlords selling properties.
Most of this is caused by smaller landlords with one or two homes, and the rental supply is declining faster than new homes are being delivered.
LandlordBuyer said decisions to sell are mainly influenced by regulatory barriers, the Renters Rights Act 2025, tax changes and administrative costs.
The declining supply of rental properties drives rent increases and limits options for tenants, which according to analyzes is due to a decrease in supply rather than an increase in demand.
LandlordBuyer director Jason Harris-Cohen said: “This is not a fire sale. Many landlords are financially secure and mortgage-free, but they are choosing to exit because the sector no longer feels predictable or proportionate in terms of risk and reward.”
“In recent years, landlords have faced a steady layering of regulations, tax changes and compliance obligations, often introduced with limited clarity about the long-term direction. For smaller landlords in particular, the administrative burden has grown to the point that the effort and uncertainty outweighs the returns.”