More than a quarter of landlords are reducing their property portfolios or have done so over the past year, according to new research from Goodlord, as the private rented sector adjusts to changes introduced by the Renters' Rights Act.
The lettings technology provider's ninth annual State of the Lettings Industry report, based on responses from more than 3,000 letting agents, landlords and tenants, found that 27% of landlords were looking to reduce their holdings or had already done so.
Among landlords reducing their portfolios or preparing to leave the sector, 65% cited the Renters' Rights Act as the main reason.
The findings come six months after the first major provisions of the Act came into force in May 2026, including the abolition of fixed term tenancies and new restrictions on rent in advance.
The changes appear to be influencing how landlords assess prospective tenants. More than a quarter (26%) said they were now more likely to reject applicants they would previously have accepted, while 31% would prefer to leave a property vacant while waiting for an applicant they considered lower risk.
A third (33%) said they had become more cautious about accepting tenants with limited or poor credit histories, previous rental difficulties or County Court Judgments.
Meanwhile, 57% of landlords said the move away from fixed term tenancies had negatively affected them, while 42% expected the introduction of the landlord database to have a negative impact.
The research also highlighted continued pressure on rental supply, with 50% of letting agents reporting a decline in available properties and 45% seeing an increase in tenant enquiries.
However, agents appear to be adjusting to some of the changes better than initially expected.
Overall pessimism among agents fell from 48% in 2025 to 40% this year, while the impact of reforms around pets has been less significant than many anticipated.
Last year, 49% of agents expected changes to tenants' rights to keep pets to have a negative impact. Following implementation, just 28% reported negative effects, with 52% reporting no impact and 20% saying the changes had been positive.
Other aspects of the legislation continue to present challenges. Some 59% of agents said restrictions on rent in advance had negatively affected them, while 57% reported an increased risk of unexpected tenant departures and vacant periods.
A further 46% said tenancy management had become less predictable.
For tenants, the findings suggest the reforms have contributed to greater confidence in renting.
More than three quarters (77%) said they felt secure in their tenancy, while the proportion expressing optimism about the sector increased from 20% last year to 37%.
Awareness of the Renters' Rights Act also increased, with 68% of tenants saying they had heard of the legislation.
Of the 7% of renters who had served notice on their tenancy since May, 70% said the Act had influenced their decision. Some 44% said they moved sooner than planned, while 26% said they would not have moved without the changes.
Despite greater security, affordability remains a concern.
More than half of tenants (53%) said they spent over 30% of their take home income on rent, while 54% had less than £500 in accessible savings or investments.
The research also found that 55% had personal debt, excluding student loans, and 35% said a significant rent increase would cause financial distress.
Further increases could be on the horizon, with 31% of landlords planning energy efficiency upgrades saying they expected to raise rents where possible to recover the costs.
William Reeve, chief executive of Goodlord, said: "This year’s survey, our biggest to date, comes just six months after the Renters’ Rights Act became effective. Overall, the industry is clearly more comfortable with the devil they know: sentiment is up compared to last year and some changes have been less disruptive than feared. The market prefers knowing where it stands.
"However, old issues continue to dog the PRS and new challenges are also emerging. Landlords leaving, rising demand and squeezed supply, and high rents are putting huge pressure on all stakeholders. And the unintended consequences of the RRA are adding to this burden; unwittingly making it harder for certain tenants to get their foot through the door,"
