Society needs more homes; landlords provide homes – is there something hard to understand about this?
There’s a bitter irony in the housing debate today.
On one hand, the Government has committed to delivering 1.5 million new homes by the end of this Parliament.
On the other, its own policy mix risks removing almost exactly the same number from the private rented sector (PRS) before the first brick is laid.
And this week, Treasury floated yet another potential burden: extending National Insurance to rental income. For many landlords, this only confirms the sense that they are seen as a bottomless tax pot.
What do landlords make of this? The numbers don’t lie
I have been looking at the detail in the best-available national data about the Private Rented Sector.
The latest English Private Landlord Survey 2024 asked landlords about their future intentions:
In total, about 607,000 rental homes could be lost through full exits, i.e. those landlords who express themselves as firmly committed to exiting – around 13% of the PRS stock (of 4.7 million dwellings). This alone is an enormous loss by any measure.
But when you also include landlords who intend to reduce their holdings by 25–75%, the potential loss rises much higher:
- Up to 1.48 million rental dwellings – nearly a third of the entire PRS. See the chart below.
That’s the figure which sits uncomfortably close to Labour’s 1.5 million new homes pledge.
Does that number of exits sound outlandish?
Well, we now have HMRC publishing the result of their own commissioned research (in May 2025, Ipsos surveyed 1,243 landlords for HMRC). This bang-up-to-date information completely reinforces the same picture:
- 24% plan to reduce holdings within 12 months
- 33% plan to reduce holdings within five years
Two separate government-backed datasets, just a few months apart, both pointing in the same direction: a strong intention to exit the sector on the part of many different types of landlord. Which means a sharp contraction in supply.
Where the 1.48m reduction comes from
Not every landlord is selling everything – many are trimming back by a quarter, a half, or three-quarters of their stock. But when you add it all together, the total is stark:
And this was before the Renters Rights Act debate
I think it’s important to note: the EPLS fieldwork predates most landlords being in a position to form firm views about the Renters Rights Act.
Since then, landlord forums, social media groups, and trade associations have been filled with increasingly hard-edged sentiment. For many, the message about more compliance, higher risk, and potentially dubious returns was already clear; they didn’t need to see another swingeing tax levy coming their way:
- Tax on turnover, not profit (Section 24).
- Layered compliance obligations – manageable in isolation, exhausting in combination.
- The Renters Rights Bill – more restrictions, less certainty.
- Energy efficiency standards about to become stricter and massively costlier to achieve.
- And now, the prospect of National Insurance levied on rent. Fingers crossed they are just floating that barmy idea out there.
It’s not hard to see exhaustion linked to negligible returns building frustration. Even if only some of that frustration translates into action, exit levels could accelerate even beyond what the surveys captured.
Still, savvy landlords recognise real opportunities
If as a landlord you equip yourself with highly experienced compliance support, attract strong tenants by offering outstanding properties, and run a tight ship in financial terms, the fundamentals of property investment can still work – exits create winners and losers. For landlords who stick with it, there are three clear opportunities::
- Less supply = more demand
Every landlord who sells reduces the rental pool. Fewer properties means higher rents and stronger tenant demand for those who remain. Understanding post-tax profitability is key. - Compliance as an investment shield
Many landlords trip up on basics: only 91% protect deposits, only 64% issue the How to Rent guide. These gaps can sink a possession claim. Landlords who are fully compliant have a moat of protection others don’t. - Long-term stability
Despite political headwinds, the fundamentals remain: population growth, household formation, and constrained new supply. Well-managed portfolios will remain a strong long-term investment.
Next step for landlords
We are entering a time of a generational shift in expectations of standards, rules, and potential penalties. Many landlords opt to go it alone in managing their properties, but it’s fair to suggest that’s just a tougher ask than it once was – the Renters Rights Act pretty much outlaws many of the casual practices and things done on a handshake that we’ve all seen. Choose a good agent at least to get yourself set up right in current tenancies and equipped for any you take on in the future.
👉 We’re offering a free Portfolio & Compliance Review to help you:
- Spot where your investment is most exposed.
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Get in touch with Northwood Leicester today. Because the best time to make your portfolio resilient is before everyone else realises the opportunity.
A call for balance
I’m avidly pro-compliance: the best way to weather what seem like mounting storms is to be so watertight that problems cannot sink you.
I’m avidly pro-agent: a good agent will sort out your lettings in safe and secure fashion, and be such a haven of knowledge about this generational change in legislation that you will have a complete lifebelt.
We are landlords ourselves (I have personal and incorporated portfolios and I share all the same concerns about the utter illogicality of government tinkering as you do – this latest idea of levying national insurance will raise less than government claims, and risk destabilising the PRS yet further). But we are where we are and I firmly believe there’s good outcomes for landlords who absorb the new rules with the support of good agents.
We believe that unless Government also sustains landlord confidence, it risks cancelling out its own housing ambitions. The EPLS and HMRC data don’t mean all those 1.48 million homes will vanish from the PRS. But they do show the scale of risk. And with landlord sentiment hardening, the danger is that risk becomes reality.
Of course, these properties also do not disappear: they can be bought for occupancy by owners. But this generally reduces capacity of occupation. And the population is growing anyway so rental volume needs to grow, not shrink.
For landlords thinking of leaving – perhaps pause. With the right strategy and strong compliance partner agent, your investment can still deliver reliable returns for years to come.
Take advantage of a FREE compliance review, and a portfolio analysis, in our Rental Clinic – we’ll bring the coffee and biscuits, you bring your burning issues.
