"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"
- Allison Thompson - LRG
New research from LRG suggests the rental sector is evolving rather than contracting. Facing economic pressures, regulatory change, and shifting tenant expectations, landlords are adjusting their strategies, prioritising long-term sustainability over short-term expansion.
The latest Lettings Report shows that 60% of landlords intend to maintain their current portfolio, indicating stability in a changing market. While 22% are considering exiting, these decisions are largely driven by rising operating costs rather than declining tenant demand. Among those planning to sell, 12% intend to reinvest in another property, often choosing more modern, energy-efficient, or lower-maintenance homes. Only 7% plan to expand, reflecting a focus on consolidation and long-term planning.
National trends mirror landlord strategies
These findings align with wider national sentiment. The DPS Private Rented Sector Review found that while 52% of landlords are considering selling some or all of their portfolio, just 25% are contemplating a full exit.
The remaining 75% expect to reinvest or rebalance holdings. HMRC’s 2024 landlord study, conducted with Ipsos, shows that 60% of landlords entered the market as investors, while 40% inherited or purchased their property to live in, highlighting the sector’s diverse motivations and the need for policies that support long-term sustainability.
Certain property types are proving more challenging. Older homes were identified by 54% of landlords as the most difficult to manage, followed by leasehold flats (29%) and larger family homes (11%). These challenges reflect regulatory complexity, energy upgrade obligations, and the costs of leasehold flats. CBRE’s May 2025 PRS insight similarly highlighted a shift away from energy-inefficient and leasehold properties as landlords look to de-risk their portfolios.
Key influences and future growth
Despite pressures, landlords remain active. The main factors influencing portfolio decisions include:
Regulatory changes (27%)
Tax policy (26%)
Mortgage rates (11%)
The British Property Federation notes that landlords are increasingly approaching their portfolios like institutional investors, focusing on long-term returns and structural resilience.
Confidence in growth is still achievable. Landlords identified factors that would encourage expansion over the next two years, including tax reform (59%), regulatory clarity (17%), faster court processes (14%), and more support with energy efficiency upgrades (10%).
Tenant demand remains strong. The NRLA reports that 71% of landlords continue to see high demand, even though only 2% feel confident in current policy direction, underscoring the need for a stable framework 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.”
