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The Renters’ Rights Act six months on: are landlords exiting the market?
Critics of the controversial Renters’ Rights Act warned that rents would rise and landlords would leave the market. Six months on, what has really happened?
The start of November marked the six-month anniversary of the Renters’ Rights Act coming into force, and despite concern in the build-up to Labour’s controversial reforms, data suggests that landlords continue to adapt.
The Renters’ Rights Act went live in May 2026, removing ‘no-fault’ evictions and giving tenants extra flexibility on tenancies and stronger rights to challenge rents.
It comes as landlords have already been hit with restrictions on mortgage interest relief to a 20% tax credit, higher stamp duty costs, right to rent checks, energy efficiency requirements and higher taxes.
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Many agents and lobby groups said the Renters’ Rights Act would force landlords to push up rents or exit the market due to the rising administrative burden.
Research from the National Residential Landlords Association (NRLA) shows landlord sentiment is at an all-time low, with its index showing a 1.5 point drop in confidence to 28.8 during the third quarter of 2026.
Meanwhile, research by Property118, an online community for landlords, from the third quarter of 2026 found that two thirds of 1,654 surveyed landlords intend to sell properties or to exit the rental market over the next three years.
But while some landlords appear to be selling, a mass exodus hasn’t materialised yet.
Analysis of Land Registry figures by estate agency brand Hamptons show 14.9% of all property sales this year up until mid October were by landlords selling up. This is an increase from 13% over the whole of 2025.
In contrast just 9.8% of all purchases up to mid-October 2026 were from landlords with the intent to let the purchased property, down from 11.5% across 2025.
David Fell, lead analyst at Hamptons, said: “While the Renters’ Rights Act marks a milestone for the buy-to-let market, it comes at the end of a long line of tax and regulatory changes which landlords have spent the best part of a decade adapting to.
“It has prompted some landlords to sell, but it hasn’t sparked an exodus. Many of those who wanted to leave the sector have already done so. The homes that are sold by smaller, older landlords are often being bought by more experienced, larger investors.”
There are risks to selling up as there may be a capital gains tax bill.
Have rents increased?
Many critics warned rents would rise due to a lack of supply if landlords sold their buy-to-lets, and to reflect the extra risks now that tenancies are no longer fixed.
Analysis of Office for National Statistics (ONS) data for MoneyWeek by landlord services company LegalforLandlords, shows rents have increased on average by 0.4% per month between implementation in May to September.
Average rents increased by 1.3% between January and May and by 1.7% between May and September.
There are regional differences. Average rents in England reached £1,466 a month in September 2026, 4% higher than a year earlier, according to the ONS.
In the North East, the average rent averaged £790 in September, up 5.3% annually.
Emlyn Akoto-Dwemoh, area director at prime estate agency John D Wood & Co, said: “We are seeing some landlords increase their asking rents, particularly as they adjust to a market in which they cannot rely on tenants offering above the advertised price.
“However, tenants remain discerning, and realistic pricing is still essential to securing a let.”
It is not just the legislation that is driving up rents though and agents claim a lack of stock remains an issue.
Alasdhair Lochrane, buying agent at property search company Heaton & Partners, says he is seeing a severe shortage of quality rental stock in the prime market, particularly from properties listed for around £3,500 per month upwards.
He says: “We recently worked with clients who sold their home in Cheshire and moved south into rented accommodation to strengthen their buying position, but they found very limited choice. The quality available was disappointing, and rents were exceptionally high and continuing to rise.
“The astronomical rent prices reflect a need to counteract added risk to landlords after the Renters’ Rights Act. The market was already moving in this direction because of declining stock, which pushed up prices, but recent regulatory changes have accelerated the trend.”
Tenant rights
Under the Renters’ Rights Act, tenants can now leave a property with two months' notice, raising the risk of homes sitting empty, meaning gaps in rent.
Meanwhile, landlords now require legitimate reasons to end a tenancy and face lengthy court delays if they need to evict a tenant who stops paying rent.
Rents can now only be increased once a year and tenants have extra flexibility to challenge ‘above market’ rises.
Plus, landlords can only ask for one month of rent in advance.
Data shows that tenants are using their powers to challenge rent rises.
Mortgage broker Cyborg Finance analysed 74 First-tier property tribunal decisions in England during September.
It found that only 21 of 74 rent tribunal cases, at 28.4%, decided in England in September 2026 saw landlords receive their proposed rent increase.
The research showed that 39.2% of cases, or 29 out of 74, resulted in a partial increase.
However, 12 – or 16.2% – ended up with no increase, and 12 concluded with either a reduction or a rejection.
Lochrane adds: “Smaller landlords exposed to greater legislative risk will continue to prompt many to sell, putting further pressure on supply.
“AI is playing a growing role in disputes, with tenants using tools like ChatGPT to generate legal correspondence and letters without needing to get third-party advice. While this can help tenants understand and enforce their rights, it can also make possession proceedings more protracted where landlords are acting lawfully and tenants are seeking to delay the process.”
This is making landlords more particular about who they rent to.
Akoto-Dwemoh says: “With landlords more conscious of the potential challenges involved in ending a tenancy, thorough referencing and understanding a prospective tenant’s circumstances are becoming ever more important than ever. Landlords are placing greater value on reliable tenants who are responsive, committed and able to move quickly.
“Equally, the greater flexibility of periodic tenancies means some tenants are giving notice sooner than landlords might have expected. In some cases, tenants who initially express an intention to stay long term are subsequently moving on after only a few months, having secured another property or made alternative plans. This can be frustrating for landlords, particularly where a tenancy was expected to be longer term.”
Meanwhile, analysis by lettings software platform Goodlord found a third of landlords would now rather leave a property vacant while waiting for a lower-risk applicant.
How landlords can prepare for the next six months and beyond
Landlords are facing other pressures in 2027 such as the launch of a new landlord register, plus taxes on rental income are set to rise by four percentage points from April 2027.
Akoto-Dwemoh suggests more landlords may explore alternatives such as short lets, which offer a defined end date, while others may increasingly opt for fully managed services as they seek professional guidance in light of the changing regulatory environment.
Kim Lidbury, president of lettings agency trade body ARLA Propertymark, says landlords remaining in the sector need to be proactive.
She says: “This means keeping documentation and processes up to date, maintaining clear communication with tenants, addressing repairs promptly and reviewing the financial viability of their properties.
“Landlords should consider their obligations under the new legislation, seek professional advice where necessary and make investment decisions based on realistic costs, local market conditions and long-term objectives, rather than relying on headlines or assumptions about how the market will respond.”
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Marc Shoffman is an award-winning freelance journalist specialising in business, personal finance and property. His work has appeared in print and online publications ranging from FT Business to The Times, Mail on Sunday and the i newspaper. He also co-presents the In For A Penny financial planning podcast.
