Landlords Not Leaving, But Thinking Differently About The Future
New research from LRG reveals a rental sector in transition. In the face of economic pressures, regulatory change and shifting tenant expectations, landlords are adapting. Most are choosing to hold, consolidate or reinvest, with long-term sustainability now taking priority over short-term expansion.
The most recent Lettings Report shows that the majority of landlords (60%) intend to maintain their current portfolio, a strong indication of stability in a changing market. While 22% are considering exiting the market, these decisions are linked to rising operating costs, not a lack of demand. It’s a market reshaping itself, not stepping back. Of those planning to sell, 12% say they will reinvest in another property, often a more modern, energy-efficient or lower-maintenance home. While only 7% plan to grow, this reflects a shift toward consolidation and long-term planning rather than expansion.
This aligns with national sentiment. The DPS Private Rented Sector Review found that while 52% of landlords are considering selling some or all of their portfolio, only 25% of those are contemplating a full exit. The remaining 75% expect to reinvest or rebalance their holdings. Insights from HMRC’s 2024 landlord study, conducted in partnership with Ipsos, show that 60% of landlords entered the market as investors, while the remaining 40% inherited or bought their property to live in, underscoring the sector’s diversity of motivations and the importance of policies that support long-term sustainability rather than exit.
Certain property types are becoming more difficult to manage. Older homes were cited by 54% of landlords as the most challenging, followed by leasehold flats (29%) and larger family homes (11%). These findings reflect growing concern about regulatory complexity, energy upgrade obligations and the costs of leasehold flats. This is consistent with CBRE’s May 2025 PRS insight, which highlighted a shift away from energy-inefficient and leasehold stock as landlords look to de-risk their portfolios.
Despite the pressures, landlords remain active and engaged. The main influences on portfolio decisions include regulatory changes (27%), tax policy (26%) and mortgage rates (11%). According to the British Property Federation, landlords are increasingly thinking like institutional investors, focused on long-term returns and structural resilience.
Confidence in the future is still possible. When asked what would encourage them to grow their portfolios over the next two years, landlords pointed to tax reform (59%), regulatory clarity (17%), faster court processes (14%) and more support with energy efficiency upgrades (10%).
Demand across the sector remains strong. According to the NRLA, 71% of landlords continue to report high tenant demand, despite only 2% feeling confident in current policy direction, reinforcing the need for stability to unlock future supply.
Allison Thompson, National Lettings Managing Director at LRG, commented “Landlords are not walking away from the sector. They are responding to a more complex environment with caution, clarity and long-term thinking. The story here is one of measured transition. This is still a market with committed landlords who want to provide good homes and make sound investments, but they need the right framework in place to do that with confidence. In a sector shaped by regulation, reform and demand-side pressure, landlords are not standing still, they are stepping forward with strategy.”
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