Private rented sector is shrinking fast as landlords abandon ship

The private rented sector is shrinking as more landlords plan to exit the sector, according to a new survey.

Property118 - The Landlords Union

11th April 2025

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Data by landlord organisation iHowz reveals 59% of landlords are considering leaving the market, with 88% of those planning to sell.

The survey also reveals that more than half of landlords (66%) have been in the market for more than 20 years, but only a third (37%) manage two to five properties and 19% manage ten to 20.

Only 4% of landlords plan to expand

According to ihowz, the main reasons for landlords leaving include the Renters’ Rights Bill, excessive regulations, including selective licensing rules and tax burdens.

The top concerns around the Renters’ Rights Bill included the abolition of Section 21 and loss of fixed-term tenancies.

Additional concerns include pet-related damage, with the Renters’ Rights Bill granting tenants the right to keep pets, which landlords cannot ‘unreasonably’ refuse.

Of those landlords staying in the private rented sector, more than half plan to reduce their portfolio, 40% will remain the same, and only 4% will expand.

PRS is shrinking

The survey also reveals the potential impact on students, with nearly half of landlords (47%) saying they would stop renting to students under the current form of the Bill.

Of those, 50% said they would switch to a non-student rental model, while 40% would leave the market altogether.

Many landlords are concerned about the upcoming energy-efficiency requirements, with Ed Miliband’s announcement that all new tenancies will need to meet EPC C targets by 2028, and all properties by 2030.

According to a survey, 19% of landlords say their properties already meet an EPC rating of C or higher. Meanwhile, 63% believe their properties are at or above average but require guidance on improvements.

More than half of landlords (55%) would be willing to invest in upgrades if necessary, while 39% are more likely to sell their properties instead.

Peter Littlewood, chief executive of iHowz, tells Property118: “This crucial survey backs up the anecdotal evidence that the private rented sector is shrinking.

“However, it also proves that once the Rights Bill comes in landlords need to be professional and be aware of everything they need to do. Keep informed with iHowz.”