The Government risks pushing more landlords out of the market when the UK needs more rental homes - Miles Pickard

Landlords are already dealing with increasing compliance demands, rising mortgage rates, and the wide-reaching impact of the Rental Reform Act. Layering additional taxation on top of this only adds to the pressure.

For larger operators, these costs may be absorbed, albeit frustratingly. But for many smaller, independent landlords, those who own just one or two properties, this could be the final straw. For some, it will make renting out their properties financially unviable, leading them to sell up.

If landlords continue to leave the market, the supply of rental homes will shrink. That means higher rents and fewer options for tenants, particularly younger people who are already struggling to save for deposits or access affordable housing.

This isn’t speculation; it’s already happening. Between 2019 and the end of 2023, approximately 163,000 privately rented properties disappeared from the market. In 2023 alone, 140,000 landlords sold their properties while only 100,000 new landlords entered the sector.

Since 2016, an estimated 400,000 rental homes have been sold off by landlords, and a separate analysis suggests as many as 383,000 more, mostly smaller, one-property landlords, could exit the market. That would mean a potential 14 per cent reduction in rental stock at a time when demand is only growing.

Additionally, anecdotally, I’ve spoken to tenants who’ve had their leases ended unexpectedly because their landlord chose to sell, not due to tenant issues, but because the increasing complexity and costs of being a landlord outweighed the benefits.

We need to acknowledge the broader context. Demand for rental properties continues to grow, driven by professional workers, students and families needing flexibility. If government policy continues to discourage landlords from providing those homes, the people most affected will be tenants, who will face rising costs and greater uncertainty.

At Pickard Properties, we’ve taken a long-term approach by developing and managing homes specifically for the rental market. That provides greater security for our tenants. But the private rental sector cannot function with just institutional or long-term operators; it needs smaller landlords too.

This proposal also feels part of a broader pattern: treating businesses and landlords as easy targets to plug the fiscal gap. Employers have already faced rising National Insurance contributions, and countless other hidden costs that squeeze margins.

The irony is stark. Many of these landlords and small property businesses are run by the same ‘hard-working people’ the government claims to be supporting. By increasing their costs, the impact inevitably passes through to tenants and the wider public. What is framed as a way to protect ordinary households may, in practice, leave them paying higher rents or facing fewer housing options.

Miles Pickard is director at Pickard Properties.