The UK’s private rental market is entering a period of significant change, but the latest figures on small landlords leaving the sector need to be read more carefully than the headline numbers suggest.
An estimated 30,000 small buy-to-let landlords are reported to have disappeared from the market in the year to April 2025, according to analysis of recently published HM Revenue & Customs data.
The figure has prompted warnings that the private rented sector could lose more landlords as higher costs and new regulations change the economics of letting property.
But the HMRC statistics do not directly record a 30,000-landlord exodus.
The latest HMRC data shows that 2.88 million unincorporated landlords declared UK property income in the 2024–25 tax year. That was higher than the 2.81 million recorded in 2020–21. The figures cover landlords reporting property income through Income Tax Self Assessment and exclude incorporated property businesses.
That distinction matters.
The data provides evidence about the changing composition and finances of landlords, but it cannot by itself establish how many rental homes have actually been removed from the private rented sector.
What the HMRC figures really show
The latest statistics show that total property income declared by unincorporated landlords was broadly unchanged in 2024–25.
Landlords declared ÂŁ58.99 billion in UK property income, compared with ÂŁ59 billion in the previous year.
Average property income rose slightly, from ÂŁ20,300 to ÂŁ20,500.
At first glance, that does not look like a sector experiencing a collapse in rental income. But the figures become more revealing when costs are considered.
Allowable property expenses reached £34.75 billion in 2024–25, up 11% on the previous year. Over the five years since 2020–21, declared property income increased by 26%, while allowable expenses increased by 56%.
Residential finance costs were the largest expense category, with £12.82 billion claimed in 2024–25.
Repairs and maintenance accounted for another ÂŁ6.41 billion, while legal, management and professional fees amounted to ÂŁ4.16 billion.
These figures do not represent every cost faced by every landlord, nor do they show individual profits. They do, however, demonstrate that the cost side of the rental business has been rising considerably faster than property income over the five-year period covered by HMRC.
The small-landlord model is particularly exposed
The private rented sector is dominated numerically by individual landlords.
HMRC recorded 2.85 million individuals declaring property income in 2024–25, accounting for 99% of the unincorporated landlord population. Nearly half of all landlords — 45% — declared property income of £10,000 or less.
This is important when considering the impact of higher costs.
A landlord with one property and a relatively modest rental income does not have the same financial capacity as a large professional property business.
A major repair, mortgage refinancing, insurance increase or regulatory expense can have a much greater effect on a small portfolio.
Government research separately shows that 45% of landlords in England owned one rental property in 2024, while another 38% owned between two and four. Together, these smaller landlords represented a majority of landlords and more than half of tenancies.
The same survey found that 31% of landlords said they planned to reduce the size of their portfolio over the following two years, including 16% who planned to sell all their properties. Only 7% planned to increase their portfolio.
Among landlords planning to reduce their holdings, recent and forthcoming legislative changes were among the most commonly cited reasons, while investment viability factors such as rising interest rates were also significant.
Those findings predate the Renters’ Rights Act coming into force, making them particularly relevant when assessing what may happen next.
The Renters’ Rights Act changes the calculation
The Renters’ Rights Act introduced major changes to England’s private rented sector from 1 May 2026.
Among the most significant changes was the abolition of Section 21 no-fault evictions, alongside a new framework based on specific grounds for possession.
The Government’s stated aim is to provide tenants with greater security while creating a more professional private rented sector.
The effect on landlords, however, depends heavily on the type of property they own and how they manage it.
A landlord who has spent years building a professional portfolio may have the resources and systems to adapt.
A landlord with one heavily mortgaged property faces a very different calculation.
That does not mean the Act caused the earlier decline in landlord numbers. The HMRC data ends with the 2024–25 tax year, before the legislation came into force. It would therefore be wrong to use those figures as evidence of landlords leaving specifically because of the Act.
What the figures do show is that the sector was already facing financial and regulatory pressures before the new regime began.
Higher taxes have also changed the investment equation
Tax policy has been another factor affecting landlords’ decisions.
In England and Northern Ireland, the higher rates of Stamp Duty Land Tax on additional residential properties were increased from 3 percentage points to 5 percentage points from 31 October 2024.
That does not affect every landlord in the same way, but it increases the upfront cost of acquiring an additional property.
For someone considering whether to buy another rental home, the calculation therefore includes not only the purchase price and mortgage but also the tax cost of entering the investment.
The wider tax treatment of property income has also changed over time.
At the same time, landlords have faced higher borrowing costs, maintenance bills and compliance requirements.
The result is a market in which the gross rent received from a property tells only part of the story.
Fewer landlords does not automatically mean fewer rental homes
This is where the debate can become misleading.
If a landlord sells a rental property, the property itself does not necessarily disappear from the housing market.
It could be purchased by another landlord and remain available to tenants.
Alternatively, it could be bought by an owner-occupier, in which case the private rental supply would fall.
The HMRC figures cannot tell us which outcome is happening in each case.
This is why a falling number of landlords should not automatically be translated into an identical fall in the number of rental properties.
The more useful measure is what happens to the stock of homes available to private renters.
That is ultimately what determines competition between tenants.
The bigger concern is replacement supply
There is another issue behind the landlord debate that receives less attention: what happens when an existing landlord leaves and nobody replaces that investment.
Government research already shows that landlords’ appetite for expanding portfolios has weakened.
The 2024 English Private Landlord Survey found that only 7% planned to increase their portfolio over the following two years, compared with 11% in 2021 and 12% in 2018. Meanwhile, 31% planned to reduce their holdings.
That does not prove that the private rented sector will shrink.
But it suggests that the flow of new investment into the sector is not keeping pace with the appetite seen in earlier surveys.
That distinction could become increasingly important.
A rental market can lose homes gradually even if the number of landlords appears relatively stable, simply because some landlords sell and the buyers do not continue letting the properties.
Tenants could face the consequences
The private rented sector exists to provide homes for people who cannot or do not want to buy.
England has around 4.7 million privately renting households, representing about 19% of all households.
Any sustained reduction in the supply of privately rented homes therefore has consequences beyond the landlord community.
If demand remains strong while available properties become harder to replace, tenants can face fewer choices and greater competition.
That can put upward pressure on rents, although the effect will vary considerably between regions and property types.
There is also a risk that landlords become more selective when choosing tenants if they perceive the financial consequences of a tenancy becoming more difficult to manage.
Government policy is therefore attempting to balance two legitimate objectives: giving tenants greater security and maintaining a private rented sector large enough to meet demand.
The difficulty is that regulation changes behaviour.
If owning and letting a property becomes less attractive at the margin, some investors will sell, some will stop expanding and others may decide not to enter the market at all.
The next data will be more revealing
The most important limitation of the current landlord figures is their timing.
HMRC’s 2024–25 statistics cover a period ending in April 2025. The Renters’ Rights Act did not come into force until May 2026.
The data therefore cannot tell us how landlords responded to the new legal regime.
Future tax returns, landlord surveys, property transactions and rental-stock data will provide a much clearer picture.
That is when the debate can move from forecasts to evidence.
For now, the available information points to a more complicated story than either side of the political argument suggests.
The UK’s landlord population reporting through Self Assessment has grown over the longer term, while the latest HMRC figures show property income broadly flat and expenses rising much faster over five years. At the same time, government surveys show a substantial proportion of landlords considering smaller portfolios and relatively few planning to expand.
The question is therefore not simply how many landlords are leaving.
It is whether enough investors remain willing to provide, maintain and replace the homes that millions of private renters depend on.
That is the measure that will ultimately determine whether today’s pressures become tomorrow’s rental shortage.
