The UK rental sector is facing an unprecedented moment of uncertainty as landlords prepare for the Renters’ Rights Bill, set to become law in early 2026. Research from Simply Business shows that 39% of landlords are considering leaving the rental market within the next year, signaling a potential crisis for renters across the country. With nearly five million households relying on private rental housing, the stakes could not be higher.
Long-Term Tenants, Short-Term Worries
The new legislation aims to strengthen renter protections, including limits on rent increases, stricter property standards, and eviction reform. Among landlords, the ban on Section 21 “no-fault” evictions is the top concern, cited by 38%, while 56% worry about longer and more costly eviction processes.
Yet the data shows most landlords are already providing stable housing:
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71% have never used a Section 21 notice.
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97% have tenants staying for more than a year.
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31% have maintained tenancies for over five years.
This suggests that while policymakers aim to protect renters, the sector is already largely compliant with stable, long-term housing provision.
The Financial Strain: Rent Caps and Energy Efficiency
Although only 8% of landlords are concerned about the proposed once-a-year rent increase cap, other costs loom large. New energy efficiency requirements could cost landlords collectively up to £9 billion, with 13% expecting to spend over £10,000 per property to meet the EPC rating of C by 2030. These measures, while beneficial for tenants—potentially saving £240 per household per year on energy bills—add substantial upfront costs for landlords.
A further 21% of landlords report uncertainty about how to meet these new energy efficiency standards, highlighting a need for clearer guidance. Without such clarity, many may see leaving the sector as the only viable option.
Tax Reform Adds Pressure
Compounding the problem, Making Tax Digital will require landlords earning over £50,000 annually to submit quarterly returns from April 2026. The survey found:
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68% feel unprepared.
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41% expect higher accountancy fees.
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45% anticipate increased administrative time.
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35% foresee more complex compliance challenges.
Combined, regulatory and tax changes could tip the scales for landlords already weighing profitability against bureaucratic complexity.
The Domino Effect on Renters
If even a conservative 30% of landlords exit, the implications for renters could be dramatic:
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Reduction in housing supply: Approximately 1.5 million rental homes could be withdrawn.
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Rent increases: Supply shortages typically push market rents higher, particularly in urban areas with tight demand.
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Widening inequality: Lower-income tenants may struggle to find affordable homes, while those reliant on private rentals face increased competition.
Currently, the private rental sector houses almost 5 million households, including students, families, and professionals. A sudden contraction would not only reduce available homes but could destabilize local rental markets nationwide.
A Call for Balanced Reform
Julie Fisher, CEO of Simply Business, emphasizes the need for clarity and support:
“With the biggest changes to tenancy law in a generation almost here, alongside several other regulation changes, landlords are asking for clarity. It’s vital they’re given the time and guidance needed to continue to provide much-needed housing for almost five million households nationwide.”
The Renters’ Rights Bill represents an ambitious attempt to improve standards and protect tenants, but without adequate support, the sector risks losing a significant portion of landlords. The data indicates a clear tension: reforms aimed at benefiting renters could inadvertently shrink the rental market, drive up rents, and reduce housing accessibility.
A Sector at a Crossroads
The UK rental market is at a tipping point. Policymakers must balance the twin goals of enhancing tenant protections while ensuring the sustainability of the landlord sector, which provides homes for millions. The decisions made by landlords in the coming months—whether to stay, sell, or exit—will shape the UK housing landscape for decades.
Without intervention, the risk is clear: fewer landlords, fewer homes, higher rents, and increased insecurity for renters across all income levels.