An estimated 220,000 households are projected to leave the private rental sector (PRS) in England by the end of 2026 according to Pepper Money.

This equates to around 5% of the country’s private rental stock, with smaller landlords in particularly likely to sell up as those who own a single property twice as likely to exit the market compared with landlords holding two or more properties.

Paul Adams, Sales Director at Pepper Money, said: “Whilst we welcome the additional protections for tenants introduced through the Renters’ Rights Act, and the continued focus on improving standards across the private rental sector, it’s important to recognise 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 fiscal and regulatory shifts that have cumulatively squeezed landlord returns and altered the economics of buy to let investing.

“With just 5% of landlords buying a new rental property in the last year, and new starts in build to rent remaining subdued, it’s unlikely this exiting stock will be replenished at the same rate, meaning we could see a dip in rental dwellings this year.” 

The South East is projected to see the highest volume of dwellings exiting the PRS, with over 46,000 dwellings leaving the market, representing over a fifth of all exits across the country, with 15% of all private landlords planning to sell.

The North East has the highest proportion of landlords intending to sell, with 21% intending to do so in 2026. However, due to the smaller number of rental properties in the region, this accounts for just 8% of total PRS exits nationally.