Why are private landlords quitting? Exodus 2026 | August

Why are private landlords quitting in 2026?

Written by the August editorial team. Last reviewed June 2026.

Private landlords are leaving the UK rental market in significant numbers. An estimated 93,000 buy-to-let landlords exited the sector during 2025, according to figures from LandlordBuyer, and official data from the English Private Landlord Survey published in December 2025 shows 31% of remaining landlords planning to reduce their portfolio and 16% intending to sell all their properties within two years. The NRLA has described the scale of landlord exits as disastrous for tenants, since a landlord selling is now the single biggest reason a tenancy ends, accounting for close to three times as many cases as the next most common cause. If you are weighing up whether to stay, you are not alone, and this guide sets out the real reasons landlords are quitting in 2026 and how to insulate yourself against each one.

Being a landlord right now is demanding, but it can still be profitable and worthwhile for those who adapt. Below are the four pressures driving exits, and what you can practically do about each.

1. Regulatory change: the Renters' Rights Act

The Renters' Rights Act, in force since 1 May 2026, is the single biggest regulatory change behind current landlord sentiment. It received Royal Assent in October 2025 and commenced on 1 May 2026, and it reshaped the basics of letting in England: Section 21 no-fault eviction is abolished, so possession now runs through the revised Section 8 grounds with a stated reason in every case; all assured shorthold tenancies have become periodic; and landlords can no longer refuse pets unreasonably or discriminate against tenants on benefits or with children.

One point is widely misunderstood, and worth stating plainly: the Act does not cap rent and does not introduce rent control. What changed is the mechanism. A landlord may now increase rent only once a year, by serving a Section 13 notice on the prescribed Form 4A with at least two months' notice, and the increase must reflect open-market rent, which the tenant can challenge at the First-tier Tribunal. There is no fixed percentage ceiling. That distinction matters, because a good deal of the anxiety driving exits rests on a version of the rules that was never enacted.

The genuine burden is keeping up. Regulatory compliance has consistently topped landlords' list of concerns, and the volume of overlapping duties, possession procedure, rent-increase process, safety certificates, licensing, is what makes self-managing feel heavier than it did five years ago.

What to do about it. The pressure is administrative, so the answer is systems rather than exit. August's compliance checklist guides you through the key legal duties, stores the evidence, and keeps you ahead of renewal dates, and if you are newer to letting, our essential checklist for accidental landlords covers the basics quickly. Staying on the right side of the Act is mostly a matter of not missing things, which is a solvable problem.

2. Rising costs and interest rates

For almost a decade the Bank of England base rate sat near 0.5%, and buy-to-let mortgage rates of 1.5% to 2.5% made letting highly profitable. From early 2022 that reversed sharply: average fixed rates climbed through 5% and beyond by late 2022, and some landlords coming off cheap fixes saw borrowing costs double or more. For mortgaged landlords, that turned a comfortable margin into a thin one, and in some cases pushed the mortgage payment above the rent coming in. Add rising repair and insurance costs and, for all-bills-included lets, higher energy prices, and the squeeze is real, which is why a meaningful share of landlords cite costs as a top reason to sell.

What to do about it. Higher rates are likely to persist for a while, so the practical moves are financial. If you are mortgaged, review whether a longer fixed rate suits you, lenders value reliable locked-in income. Rents are at or near record levels across every UK region, so where a property has been let below market, a measured, correctly served Section 13 increase can restore margin, though it must reflect open-market rent. The aim is to make the numbers work before concluding they cannot.

3. Tax: Section 24 and beyond

Section 24 of the Finance Act, introduced in April 2017 and fully phased in by 2020/21, stops individual landlords with a mortgage from deducting mortgage interest as an expense; instead they receive a basic-rate (20%) tax credit. For higher-rate taxpayers this raised the effective tax on rental income substantially, and when costs spiked from 2022 it produced the now-familiar squeeze, paper profits taxed while real cashflow tightened. On top of this, Making Tax Digital for Income Tax is now live, from 6 April 2026 for landlords with qualifying income above £50,000, dropping to £30,000 in April 2027 and £20,000 in April 2028, adding a quarterly digital-reporting obligation that did not exist before.

What to do about it. For some landlords, holding property through a limited company reduces the Section 24 hit, since companies still deduct mortgage interest, but incorporation carries Capital Gains Tax and Stamp Duty Land Tax consequences and ongoing costs, so it is not automatically worthwhile and needs advice on your numbers. Transferring a share to a lower-earning spouse can also help. On MTD, the burden is mostly setup: keeping digital records from the start of the year, rather than reconstructing them each quarter, is what makes it manageable. None of this is a reason to sell by itself; it is a reason to get the structure right.

4. Energy efficiency: MEES and the EPC C target

Landlords have long had to meet Minimum Energy Efficiency Standards, with a minimum EPC rating of E. Under the Warm Homes Plan confirmed in January 2026, that minimum rises to band C, for new tenancies first and for all tenancies by 2030. A large share of rental homes sit below C today, so for many landlords this means real upgrade work, and the shifting timeline over the years (originally 2025, then 2028, now 2030) has bred uncertainty that itself pushes some to exit rather than invest.

What to do about it. The detail, the current cost cap, the exemptions, and which improvements count, is moving, so our MEES guide for landlords is the place to check the live position before you spend. As a rule, planning upgrades in stages and bundling them with other works is far cheaper than rushing them close to a deadline, and a better-rated home also lets more easily and runs cheaper for tenants. Treat it as a scheduled capital project, not an emergency.

Is it still worth being a landlord in 2026?

With heavier regulation, higher financing costs and a tighter tax position, letting is undeniably harder than it was a few years ago. But the case for staying is also stronger than the headlines suggest. As landlords sell, supply tightens while demand stays high, which supports rents and keeps well-managed, compliant properties in strong demand. For landlords who own outright or hold favourable fixed-rate borrowing, the economics remain sound. The real challenge is less any single rule than the cumulative load of keeping up, and that load is what good systems are for, much of the stress driving exits comes from disorganisation rather than the underlying investment. Whether to stay is ultimately a numbers question, which we work through in is it worth renting out a house, and the landlords who stay informed and run their portfolios properly continue to do well. If you want to lighten the administrative side, you can start for free and see how much of the load is removable.

Disclaimer: this article is a guide and not intended to be relied upon as legal, tax or professional advice. Tax treatment depends on individual circumstances and rules change. August accepts no liability for decisions made on the basis of this content. Always take advice from a suitably qualified professional.