Landlords Warn of Rental Exodus as UK Rent Reform Sparks Market Anxiety

“Much of what it seeks to do is welcome, but without more housing supply, it may only deepen the crisis.”— Seb Verity, property consultant at Allsop

A major shift in Britain’s rental housing market is unfolding as hundreds of landlords across England prepare to exit the sector ahead of Labour’s sweeping rental reforms, raising concerns over rising rents, housing shortages, and growing pressure on tenants already struggling in a tight market.

According to a new survey by Allsop, nearly 42 percent of more than 1,000 landlords questioned said they plan to stop renting out homes once the government’s Renters’ Rights Act comes into force on May 1. Almost half 48.4 percent said they intend to sell some or all of their rental properties, while many others are considering rent increases to offset mounting costs.

The legislation represents the most significant reform of the private rented housing sector in a generation. It is designed to strengthen tenant protections by banning Section 21 “no-fault” evictions, limiting rent increases to once per year, and giving renters greater long-term security in their homes.

Labour argues that the law is necessary to end unfair evictions and improve living standards for millions of tenants across the country. However, property experts, landlords, and housing groups warn that the reforms may unintentionally reduce the number of available rental homes and make affordability even worse.

The concern is particularly sharp among smaller landlords, many of whom say they are already under financial strain from higher mortgage rates, increased taxation, and stricter energy efficiency requirements for rental properties.

Seb Verity of Allsop said many landlords he had spoken to were deeply discouraged by the cumulative burden of regulation and rising costs.“The weight of regulatory change, layered on top of mortgage rate rises, higher taxes and meeting energy efficiency requirements, is testing the resolve of a large cohort of smaller landlords,” he said.

He added that while many aspects of the Renters’ Rights Act are well intentioned, its long-term success depends on whether the government can address the wider housing shortage.“Much of what it seeks to do is welcome, but in the absence of a more effective strategy to increase housing supply and affordability, it may well end up serving only to add to or compound existing housing challenges,” he said.

Britain’s housing market has faced years of supply shortages, with too few new homes being built to meet demand. Housebuilders and industry bodies have repeatedly warned that Labour may struggle to meet its ambitious target of building 1.5 million homes by 2029.If landlords continue to leave the buy-to-let market, experts say the supply of rental properties could shrink further, pushing rents even higher and reducing options for families, students, and young professionals.

The reforms are also prompting fears of a short-term wave of tenant evictions before the ban on Section 21 notices officially begins. Some landlords may choose to remove tenants now while they still retain that legal option.Legal advice firm Landlord Action reported a 43 percent increase in Section 21 instructions during the first three months of 2026 compared with the same period last year, suggesting that some landlords are already acting in anticipation of the law.

However, Housing Minister Matthew Pennycook has rejected fears of a major eviction spike, stating that the government does not expect a significant surge.The Ministry of Housing, Communities and Local Government also pushed back against claims of a landlord exodus, saying there is no clear evidence that the private rented sector is collapsing.

A government spokesman said the rental market has doubled in size since the early 2000s and insisted that responsible landlords have little to fear from the reforms.“Good landlords who provide quality homes have nothing to fear from the Renters’ Rights Act, which will give millions of tenants stronger rights and more security in their homes,” the spokesman said.

The debate highlights a long-running tension in British housing policy: how to protect renters without discouraging investment in the rental market itself.Tenant advocacy groups argue that stronger legal protections are long overdue. For years, renters have faced insecurity, sudden rent hikes, and the threat of eviction with little warning.

Campaigners say the end of no-fault evictions will provide basic housing stability for millions.Landlords, however, argue that the reforms remove flexibility and control over their own properties, particularly in dealing with difficult tenants or changing financial circumstances.

The roots of the legislation stretch back to 2023, when former housing secretary Michael Gove first introduced a bill to reform the private rental sector. That proposal failed to pass before Parliament was dissolved for the general election. After winning power, Labour introduced a revised version and moved quickly to bring it into law.

Now, as implementation begins, both tenants and landlords are watching closely.For renters, the reforms promise greater security and fairness. For landlords, they signal a future with tighter regulation and narrower profit margins.

For the broader housing market, the outcome may depend on whether Britain can solve its deeper problem the simple lack of enough homes.If supply continues to fall while demand rises, stronger tenant rights alone may not be enough to prevent rents from climbing higher.

The Renters’ Rights Act may transform how Britain rents, but whether it solves the housing crisis or intensifies it remains uncertain.Short SummaryThousands of landlords across England are considering leaving the rental market as Labour’s Renters’ Rights Act takes effect on May 1. The law bans no-fault evictions and limits rent increases, aiming to protect tenants.

However, landlords warn that rising taxes, mortgage costs, and stricter regulations may force them to sell properties or increase rents. Experts fear this could reduce rental supply and worsen Britain’s housing shortage.