Rising operational costs and increased regulation are driving landlords to exit the private rental sector, according to warnings from industry figures, as average rents reach £1,393 per month.
Saif Derzi, co-founder of Landlord Resource and a landlord himself, has cautioned that persistent negative portrayal of landlords combined with regulatory changes risks accelerating departures from the market.
“Keep attacking landlords, and you’ll lose them. Of course, landlords acting inappropriately and exploiting tenants should be penalised, but good landlords who are responsible and fair shouldn’t be painted with the same brush,” Derzi said.
The warning comes as Office for National Statistics figures released this month showed rents increased 3.7% in the year to July 2026, reaching an average of £1,393 monthly.
Cost pressures mounting
Derzi argued that landlords are not benefiting from rental increases, stating: “Even though private rental rates have gone up, landlords won’t reap many benefits from this. The additional amount might not even touch the surface when trying to match factors such as increased mortgage costs, insurance, repairs, maintenance, and compliance costs.”
Buy-to-let mortgage costs have risen substantially, alongside repair and maintenance expenditure. The trend towards limited company structures for buy-to-let ownership reflects landlords’ attempts to manage tax and operational pressures.
Additional costs are scheduled to come into effect. The new PRS Database is due to begin rollout later this year, requiring landlords to pay an annual registration fee that has not yet been confirmed. Mandatory membership of the new PRS Landlord Ombudsman is expected to follow subsequently.
Regulatory changes
Under the Renters’ Rights Act, the abolition of Section 21 is expected to result in longer dispute cases, while meeting future homes standards is likely to bring significant repair bills, according to Derzi.
“New Renters’ Rights Act policies are helping shift power away from landlords to tenants, and consequently, landlords are often left to look like the problem,” he said.
The regulatory changes come as debate around rent control intensifies, with concerns about potential impacts on rental supply. Data shows that letting agent use has reached a two-year high, suggesting landlords are increasingly seeking professional management support.
Market implications
Derzi warned that the cumulative effect of costs and negative sentiment could lead to “more selling up, higher rents, or fewer people entering the sector.”
The potential reduction in landlord numbers raises questions about rental supply at a time when demand remains elevated, with implications for both rent levels and tenant choice in the private rental market.
