The latest Landlord Trends Q4 2025 data shows that more than a quarter of landlords who sold property over the past year did so with existing tenants in place. Where this occurred, landlords typically sold an average of 1.8 properties with sitting tenants.

Around three in ten properties sold by landlords were purchased by another landlord, suggesting that a proportion of divested stock continues to be recycled within the sector.

However, the research also shows that a significant share of these properties are transitioning into owner occupation. More than a third (34%) of landlord sales went to first-time buyers, and 29% to other residential buyers, meaning those homes are likely to leave the rental market altogether.

Taken together, the findings indicate that while some properties remain within the PRS when landlords sell, the balance of sales still points towards a gradual contraction in the overall supply of rental homes.

Commenting on the findings Pegasus Insight founder and director Mark Long said: “Landlord sales do not automatically mean a rental property disappears from the sector. In a meaningful minority of cases the property is simply being transferred from one landlord to another and sometimes sold with tenants already in place.

“However, the overall direction of travel still points to a shrinking PRS. When a substantial proportion of landlord sales are going to first-time buyers or other owner occupiers, it inevitably reduces the pool of homes available for rent.

He added: “Policymakers must recognise the cumulative impact of ever tighter regulation and rising taxation on landlords, particularly smaller operators. Many are deciding that the pressures and uncertainty are no longer worth it. This is significant because the PRS provides homes for around 20% of the UK’s households, so policy decisions affecting landlords ultimately have consequences for tenants too.”