Should I stay or should I go is a live question amongst many landlords at the moment. The Head of Lettings from a large agency told me that in April she saw a 30% increase in section 21 notices being served as many landlords had decided to sell.Another branch manager told me that he had referred 30 landlords to the property sales team since January 2026.But since then, 16 had come back to him because they couldn’t get the price they were hoping for or they were deterred by the size of the prospective CGT bill.
Looking at the data on whether landlords are actually throwing in the towel, the latest Pegasus research for the NRLA has found that 23% of landlords sold one or more properties in the past 12 months and only 6% had bought.Interestingly, 57% have a market exit timeline in mind.The most popular exit window is in 3-5 years with 23% saying that was their plan.9% want to sell in 12 months, 9% in 1-2 years, but 10% are waiting 6-10 years and just 4% will exit in 11-20 years.The size of the private rented sector (PRS) in England has remained stable over recent years at 19% of housing.It is not growing as fast as it used to, but neither is it contracting.So, there are investors out there and some are snapping up good deals.First Time Buyers have also been active with their mortgage payments at 33% of average take home pay - close to the long-term average of 30%, according to Nationwide.
So, who is leaving and why? The average age of the NRLA landlord is 64 and generational change seems to be a factor here. The UK average house price has roughly doubled since 2009. Those who bought in the 90s and 00s are cashing in on growth in the past decade - or three. Particularly in London and the south east, excluding prime central London, which has seen exceptional growth between 2012 and 2022. Older landlords have long memories and were irked by the Osborne era tax and underwriting changes in the middle of the last decade. The loss of wear tear allowances, additional stamp duty of 3% - now 5% - and the absurdity of section 24 tax calculations where finance costs are added to your income and then taxed. Stress tests introduced by the Prudential Regulation Authority effectively put an end to buying, refurbishing and refinancing unless you had a very big deposit, especially in London. The flood of new specialist lenders with their flexible but pricey products also ate into profits. Add to this political hostility that hardened during the Corbyn leadership of the Labour party and being a landlord became pretty miserable for many.
The most important recent driver is the Renters Rights Act. As social housing was replaced in part by the PRS, the writing has been on the wall for section 21 for a number of years. Campaign groups were demanding more security of tenure for those families and vulnerable tenants now housed in the PRS.But even landlords that were willing to embrace change hadn’t counted on a new regime of periodic tenancies that could last between two months and a lifetime.In addition, the act contains so many changes that are plainly stupid and fail to understand the industry.
Student landlords cannot understand why they can only let HMOs to full time students so 1 and 2 bed flats that make up 29% of the sector are out of bounds.Upfront rent was the norm for overseas students who cannot be referenced, but that has been banned beyond one month.Four months’ notice for selling or moving in seems reasonable to many landlords but if your buyer falls through, the property could be empty for 12 months as re-letting before that will be banned.
