Around 30,000 small landlords left the buy-to-let market in the year to April 2025, according to new government figures, with industry groups warning the number leaving is likely to keep rising.
The figures cover small landlords, defined as those who let property as individuals rather than through a company, and who typically earn less than £30,000 a year from rental income.
It is the first year-on-year fall in landlord numbers since 2020-21, when the market was disrupted by the pandemic.
Industry groups say the more recent fall reflects new rules and rising costs, rather than any short-term disruption, and expect the number of landlords leaving the market to keep growing over the next two years.
Alongside the fall in landlord numbers, total rental income declared by this group also dipped, down around £10 million on the previous year. The average small landlord reported £20,500 in rental income, only £200 more than the year before, a rise that does not keep pace with inflation.
The changes were not felt equally across the country. Government data shows London landlords saw the biggest fall in total declared income, down around £350 million, a two percent drop. The South East saw roughly 7,000 fewer landlords, and Scotland recorded a fall of about 2.4 percent, equivalent to around 4,000 landlords. The Midlands also saw a decline, with around 4,000 fewer landlords across the East and West Midlands combined, down from 393,000 to 389,000, a fall of about one percent. The steepest percentage fall in landlord income was in the Channel Islands, down almost 24 percent, followed by the East of England, down close to five percent.
Landlords cite rising costs and new rules
Chris Norris of the National Residential Landlords Association, a trade body representing landlords, said the fall in landlord numbers coincided with the period leading up to the introduction of the Renters’ Rights Act, which came into force in May. He said landlords were dealing with more complex rules, higher taxes and lower profits, prompting some to reconsider whether to stay in the sector. He added that a shrinking supply of rental homes was likely to push rents higher for tenants.
Separate research from letting platform Goodlord found that around a third of tenants had seen their rent rise since the new law came into effect. The average cost of a new tenancy in England rose from £1,211 in May to £1,309 in June.
Paul Shamplina, founder of Landlord Action said that landlords were increasingly deciding to sell rather than continue letting, citing higher taxes, rising interest rates, tighter regulation and increased maintenance costs. He said he expected figures for 2025 and 2026 to show the trend continuing, and warned that fewer rental properties on the market would mean higher rents for tenants in the short term.
Rachel Reeves, the former chancellor, raised stamp duty on additional residential properties from three percent to five percent in her autumn 2024 Budget, a change landlord groups say has also weighed on the sector.
The Renters’ Rights Act was introduced to strengthen protections for tenants. Industry figures argue that, in the short term at least, the reduced supply of rental homes may be adding pressure to rents in some areas, though it remains to be seen how the market settles as the changes continue to take effect.