The supply of rental properties is in crisis as listings drop to record low levels as landlords leave the market, according to analysis by LandlordBuyer.

Just over a third (35%) of rented properties have buy-to-let mortgages, meaning most landlords have no homeloan. This implies an easier financial hurdle when it comes to selling, meaning landlords can react quickly to market conditions, LandlordBuyer said.

LandlordBuyer cited recent industry surveys revealing that 34% of letting agents have seen a rise in landlords selling off properties.

Most of this is driven by smaller landlords with one or two properties, and rental supply is falling quicker than new homes are being delivered.

LandlordBuyer said that decisions to sell are mostly influenced by regulation hurdles, the Renters Rights Act 2025, tax changes and administrative costs.

Falling rental property supply encourages rent rises and cuts tenant options, which analysis suggests is more due to a drop in supply than an increase in demand.

LandlordBuyer managing director Jason Harris-Cohen said: “This isn’t distress selling. Many landlords are financially secure and mortgage-free, but they’re choosing to exit because the sector no longer feels predictable or proportionate in terms of risk and reward.”

“Over recent years, landlords have faced a steady layering of regulation, tax changes and compliance obligations, often introduced with limited clarity around long-term direction. For smaller landlords in particular, the administrative burden has grown to a point where the effort and uncertainty outweigh the returns.”