"More tenants are becoming highly focused on their rights, asking informed questions and actively engaging with what the Act means for them. It’s creating a shift in conversations on both sides of the tenancy"
- Megan Eighteen - ARLA Propertymark
Rental supply across the UK property market is beginning to tighten as landlords respond to the Renters’ Rights Act, with early signs that some are choosing to exit the sector amid rising regulation and compliance costs.
The legislation introduces wide-ranging reforms to England’s private rented sector, prompting mixed reactions from landlords, letting agents and property professionals.
What the Renters’ Rights Act means for rental supply
The Renters’ Rights Act represents one of the most significant overhauls of landlord regulation in decades.
Key measures include:
- The removal of Section 21 ‘no-fault’ evictions
- Open-ended tenancies with no fixed end date from 1 May 2026
- Limits of one rent increase per 12-month period
- A ban on rental bidding above advertised rents
- Caps on rent in advance
- The introduction of a right for tenants to retain a pet
Further reforms include a new ombudsman and a national landlord database expected in 2027, aimed at improving transparency and tenant protections across the England and Wales rental market.
Landlords reassess positions in the UK property market
Megan Eighteen, a London-based letting agent, said: “The Renters’ Rights Act is clearly changing behaviour in our local market. We’ve seen a surprising increase in landlords exploring a sale, often driven by uncertainty around the new regulations."
"Interestingly, at the same time, more tenants are becoming highly focused on their rights, asking informed questions and actively engaging with what the Act means for them. It’s creating a shift in conversations on both sides of the tenancy.”
Across regional markets, similar trends are emerging as landlords review the viability of their investments.
Josh Jones, based in the West Midlands, said: “The Renters’ Rights Act has led many landlords with smaller portfolios to reassess the viability and profitability of holding rental property due to increased regulation and higher compliance costs, making them question whether their returns justify their continued investment in the private rental sector.”
He added: “This has reduced the supply of available homes at a time when tenant demand remains strong, resulting in increased competition and upward pressure on rents. Larger and more professional landlords are adapting, but overall, the local market has tightened rather than expanded.”
Regional variations in landlord response
The impact of the Renters’ Rights Act is not uniform, with local market conditions shaping how landlords respond.
Jasmyne Devereaux, based in Essex, said: “In the month of January, in one of my offices, out of the scheduled tenancies ending, 33.33 per cent of those are being sold. The remaining percentage is being relet.
“The sales market remains strong here in Essex, which is giving those landlords wanting to sell an easy decision to make.”
In more rural markets, operational concerns are also emerging.
Pauline Carrera-Silva, who operates in Lancashire and Cumbria, commented: “As we have a lot of agricultural tenancies, concerns have been raised about tenants being able to keep pets, especially on residential tenancies that are located on a working farm.
“As much as farmers love their animals, there is a world of difference between a well-trained working farm dog and a family pet.”
A more measured view from some agents
Not all industry professionals expect significant disruption.
Jacqui Courtier, based in Devon and Somerset, said that “the Act is not a dramatic shift and more of a move towards greater consistency across the sector.”
She added that “the legislation should not be viewed as something to fear for landlords who are already doing the right thing.”
What this means for landlords
The early response to the Renters’ Rights Act highlights several emerging trends for landlords and investors:
- Smaller landlords are more likely to exit due to rising compliance costs
- Larger, professional operators are better positioned to adapt
- Tenant demand remains strong, increasing pressure on available stock
- Rental supply is tightening, which may support rental yields
For lenders and brokers, these shifts could influence borrowing demand, refinancing activity and portfolio restructuring across the buy-to-let market.
What happens next for rental supply
As the Renters’ Rights Act continues to roll out, attention will turn to whether landlord exits accelerate or stabilise once the new framework beds in.
The direction of travel suggests a more regulated sector with fewer, more professional landlords. However, if supply continues to contract while demand remains high, upward pressure on rents is likely to persist across the UK property market.
