With all the extra work involved, it is no surprise that a quarter of landlords are actively selling or looking to sell properties, according to landlord management platform Goodlord. A third of landlords don’t believe they will still be a landlord in five years’ time, the research found.
Chris Norris, chief policy officer at lobby group the National Residential Landlords Association said there are a range of factors driving investor behaviour across the private rented sector.
He said: “With tight profit margins commonplace, it can be tough for private landlords to justify letting out rental properties given current conditions across the market.
“Although there is no single reason that causes landlords to exit the sector, changes such as the introduction and subsequent hiking of the stamp duty surcharge have discouraged individuals from investing in properties.
“The removal of mortgage tax relief, higher maintenance costs, fluctuating interest rates on buy-to-let mortgages, and general regulatory pressure have also had a negative impact.”
So what are the options for those considering getting out of the property investing game?
Keep the property – and boost profits
Clearly, some landlords want to hold on to their properties, particularly if they haven’t yet seen much capital growth, but want to find ways to increase their profits.
One option to consider is the holiday-let market, where a property is rented out for shorter periods on platforms such as Airbnb.
The tax perks of furnished holiday lets were scrapped in April 2025, but short-term rentals can be more flexible. You have more freedom about what you can charge and when, and who you rent to, although there may be restrictions on how many days a property can be rented out in certain areas.
Steven Greenall, of mortgage adviser Protect and Lend, said: “Professional landlords and younger property entrepreneurs are finding more and more inventive ways to make renting out property work for them.
“These include holiday lets, Airbnbs, corporate lets – particularly in areas where large infrastructure projects are happening, such as South Tyneside, or government-backed schemes where landlords are guaranteed to receive rents paid by local authorities.
“There is still life in the rental market yet.”
Other landlords are turning their property into houses of multiple occupation (HMOs), which lets them turn a house into separate units to rent out. There may be licensing regulations to follow and, in some areas, planning permission may be required.
Wesley Davidson, director at FD Commercial, said rising mortgage rates and tax changes have squeezed single-let returns into losses. But, he argued, the same asset can perform very differently as an HMO or short-term let.
He said: “We’re seeing landlords add bedrooms and convert to multi-lets. A three-bed single let at £1,200 a month can become a four or five-bed HMO at two to three times that yield.”
However rent is earned, there will still be income tax to pay.
For the 2025-26 tax year, this is taxed at 20pc, 40pc, or 45pc based on income bands. But from April 2027, these rates are rising to 22pc, 42pc and 47pc respectively.