Around 220,000 rented homes will be sold by the end of 2026, according to research from Pepper Money.
Pepper said this equates to around 5% of the country’s private rental stock.
This trend is most pronounced among smaller landlords, with those owning a single property twice as likely to exit the market compared with landlords holding two or more properties.
The upcoming Renters’ Rights Act, coming into effect in May 2026, emerged as a major trigger, influencing landlords to withdraw over 65,000 households from the PRS in England by the end of the year.
The legislation’s changes to tenancy agreements, notice procedures and property management obligations is prompting landlords to reconsider their portfolios across the country.
The research focuses exclusively on England, where the Renters’ Rights Act introduces legislative changes directly affecting landlords and tenants.
Pepper Money sales director Paul Adams said: “Our research highlights how the combination of changing legislation and rising operating costs is prompting many landlords to review their portfolios.
“While we welcome the additional protections for tenants introduced through the Renters’ Rights Act, and the continued focus on improving standards across the private rental sector, it’s important to recognise the potential unintended consequences for supply and pricing at a time when the sector is already under pressure. These legislative changes follow a series of fiscal and regulatory shifts that have cumulatively squeezed landlord returns and altered the economics of buy to let investing.
“With just 5% of landlords buying a new rental property in the last year, and new starts in build to rent remaining subdued, it’s unlikely this exiting stock will be replenished at the same rate, meaning we could see a dip in rental dwellings this year.”
The South East is projected to see the highest volume of dwellings exiting the PRS, with over 46,000 dwellings leaving the market, representing over a fifth of all exits across the country. Here, 15% of all private landlords plan to sell.
Meanwhile, the North East has the highest proportion of landlords intending to sell, with one in five (21%) planning to sell in 2026.
However, due to the smaller number of rental properties in the region, this accounts for just 8% of total PRS exits nationally.
Table 1: Households exiting PRS in England; by region
| Region | % of landlords planning to sell | Estimated households exiting PRS (rounded to nearest 100) | % of total exits |
| North East | 21% | 18,000 | 8.3% |
| North West | 8% | 22,500 | 10.3% |
| Yorkshire & Humber | 10% | 18,500 | 8.5% |
| East Midlands | 14% | 24,000 | 11.0% |
| West Midlands | 5% | 10,700 | 4.9% |
| East of England | 10% | 22,200 | 10.2% |
| London | 6% | 29,200 | 13.4% |
| South East | 15% | 46,200 | 21.2% |
| South West | 13% | 26,800 | 12.3% |
| Total | — | 218,100 (rounded to 220,000 for headline figures) | 100% |
Source: Pepper Money’s Landlord Exiting Research
Note: Figures represent maximum market potential
The average rents in these regions highlight the potential market impact of these exits.
In the South East, where rental demand is high, advertised rents currently average around £1,893 per month according to property portal Rightmove.
As such the projected exit of over 46,000 homes could intensify competition and put further upward pressure on prices, Pepper said.
Regional rental yields further explain landlord behaviour; in the South East yields are relatively modest at around 6%, which may make property investment less resilient to increased regulation.
In the North East, average rents are lower, at around £946 per month, yet the high proportion of landlords planning to sell signals significant regional shifts in landlord sentiment even in more affordable markets.
Other regions, including the East of England (£1,649 pcm), South West (£1,473 pcm), and London (£2,716 pcm), also show elevated rents, underscoring widespread market pressures across England.
From 1 May 2026, renters in England will see some of the biggest changes to their rights in decades.
Tenants will no longer face ‘no-fault’ evictions, giving them greater security in their homes, and fixed-term tenancies will automatically convert to rolling periodic tenancies, typically paid monthly or weekly.
Rent increases will be limited to once a year, and tenants will have the power to challenge rises they consider unfair.
From late 2026, a Private Rented Sector Database will also be introduced, requiring landlords to pay to join. Looking further ahead, all privately rented homes are expected to meet new energy efficiency standards by 2030, meaning better insulation, lower bills and greener living for renters.
