Small landlords are quitting the private rental sector in increasing numbers, as concerns mount that the government’s Renters’ Rights Bill will accelerate their departure and further destabilise the lettings market.

New data from Alto, the property software provider, reveals that one in three letting agents (34%) have seen a marked rise in independent landlords selling their properties and leaving the market altogether. Of the 250 agents surveyed, nearly all – 93% – expressed concern about losing their small-scale landlord clients for good.

The survey also found that 70% of agents reported landlords had already sold at least some of their portfolio in the past year, in what many now describe as an exodus.

CRISIS AHEAD?

The findings arrive as the government presses ahead with reforms that will abolish fixed-term tenancies and remove landlords’ rights to use Section 21 notices to evict tenants without giving a reason. While the changes are designed to offer tenants greater security and predictability, many in the industry warn they risk tipping an already stretched rental sector into crisis.

The landlords leaving the sector are, in many cases, not professional investors but individuals who own one or two properties, often acquired as part of a retirement plan or inherited from family. Many have cited the growing burden of regulation, rising costs, and a general sense of being unwelcome in the current climate.

“Independent landlords are the lifeblood of the sector,” said Riccardo Iannucci-Dawson, chief executive of Alto. “If we lose them, tenants lose choice and stability – and we risk pushing rents even higher.”

He added that letting agents are now caught in the middle, expected to manage increasing volumes of compliance and operational demands while continuing to serve landlords and tenants.

CLEARER GUIDANCE

Alto, which provides customer relationship management software to more than 25,000 letting agents across the UK, has called on the government to provide clearer guidance on the implementation of the Renters’ Rights Bill. In the meantime, the company is stepping up support through its own technology solutions.

“Our focus is on making compliance faster, easier and more robust,” said Iannucci-Dawson. “Letting agents are facing unprecedented pressure – from legislative upheaval to operational chaos – and we’re helping them meet that challenge head-on.”

He pointed to recent updates that automate key processes such as Right to Rent checks, tenancy creation, rent review enforcement and tenant request management, allowing agents to stay ahead of reform without sacrificing efficiency or income.