According to research by Pepper Money, around 220,000 rental properties will have been sold by the end of 2026.
Pepper said this amounts to approx 5% of the country’s private rental stock.
This trend is most pronounced among smaller landlords, with those who own one property twice as likely to leave the market compared to landlords who own two or more properties.
The upcoming Renters’ Rights Act, which comes into force in May 2026, emerged as a major trigger, influencing landlords to withdraw more than 65,000 households from PRS in England by the end of the year.
The changes in legislation regarding lease agreements, termination procedures and property management obligations are causing landlords across the country to reconsider their portfolios.
The research focuses exclusively on England, where the Tenants’ Rights Act introduces legislative changes that directly affect landlords and tenants.
Paul Adams, sales director at Pepper Money, said: “Our research shows how the combination of changing legislation and rising running costs is causing many landlords to review their portfolios.
“While we welcome the additional protections for tenants introduced through the Renters’ Rights Act, and the continued focus on improving standards in the private rental sector, it is important to recognize the potential unintended consequences for supply and pricing at a time when the sector is already under pressure. These legislative changes follow a series of tax and regulatory shifts that have cumulatively depressed landlord returns and transformed the economics of buy to let.
“Given that only 5% of landlords have purchased a new rental property in the last year and the number of new homes in the construction and rental sector remains subdued, it is unlikely that this existing stock will be replenished at the same pace, meaning we could see a dip in rental properties this year.”
The South East is expected to see the largest number of homes leaving the PRS, with more than 46,000 homes leaving the market, representing more than a fifth of all exits across the country. Here, 15% of all private landlords plan to sell.
Meanwhile, the North East has the highest proportion of landlords planning to sell, with one in five (21%) planning to sell by 2026.
However, due to the smaller number of rental properties in the region, this is only 8% of the total PRS outflow nationally.
Table 1: Households leaving the PRS in England; by region
| Region | % of landlords planning to sell | Estimated households leaving the PRS (rounded to 100) | % of the total number of exits |
| North-East | 21% | 18,000 | 8.3% |
| North West | 8% | 22,500 | 10.3% |
| Yorkshire & Humber | 10% | 18,500 | 8.5% |
| East Midlands | 14% | 24,000 | 11.0% |
| West Midlands | 5% | 10,700 | 4.9% |
| East of England | 10% | 22,200 | 10.2% |
| London | 6% | 29,200 | 13.4% |
| Southeast | 15% | 46,200 | 21.2% |
| South West | 13% | 26,800 | 12.3% |
| Total | — | 218,100 (rounded to 220,000 for the key figures) | 100% |
Source: Pepper Money’s landlord abandons investigation
Note: The figures represent the maximum market potential
The average rental prices in these regions highlight the potential market impact of these exits.
In the South East, where demand for rental properties is high, advertised rental prices currently average around €1,893 per month according to property portal Rightmove.
As such, the expected exit of more than 46,000 homes could intensify competition and put further upward pressure on prices, Pepper said.
Regional rental yields further explain landlord behavior; in the southeast, returns are relatively modest, around 6%, making real estate investments less resistant to stricter regulations.
In the North East, average rents are lower, at around £946 per month, but the high percentage of landlords planning to sell indicates significant regional shifts in landlord sentiment, even in more affordable markets.
Other regions, including the East of England (£1,649 pcm), South West (£1,473 pcm) and London (£2,716 pcm), are also showing higher rents, highlighting widespread market pressure across England.
From May 1, 2026, tenants in England will see some of the biggest changes to their rights in decades.
Tenants will no longer face no-fault evictions, giving them greater security in their homes, and fixed-term leases will automatically convert to periodic leases, typically paid monthly or weekly.
Rent increases will be limited to once a year, and tenants will have the power to challenge increases they consider unfair.
From the end of 2026, there will also be a Private Rental Sector Database, which landlords will have to pay to join. Looking further ahead, all private rental properties are expected to meet new energy efficiency standards by 2030, meaning better insulation, lower bills and a greener life for tenants.