Small landlords likely to exit as Renters’ Rights Act looms

Next year will see more small landlords leaving the private rented sector as younger landlords will shape the market, claims firm.

Goodlord predicts 2026 will see some landlords throw in the towel as the Renters’ Rights Act comes into force on 1 May 2026.

The lettings software company says preparation is key to navigating the changes.

More smaller landlords will decide it isn’t worth it anymore

Tom Goodman, managing director of the Goodlord group, said: “In 2026, more smaller landlords will decide it isn’t worth it anymore and smaller agencies will also look to exit.

“The regulatory pressure, the compliance burden, the margin squeeze: it adds up. The ones staying in are either scaling up or finding a specific niche they can own.”

He adds younger landlords will reshape expectations in the market and letting agents will need to adapt.

He said: “The landlords coming into the market now are more digitally native. They’ve grown up with different expectations around communication, transparency, and data access.

“Letting agencies still operating the way they did five years ago are going to struggle to win them.”

Tenants are going to want to stay put

Under the Renters’ Rights Act, all fixed-term tenancies will be banned and become periodic.

Despite concerns from landlords and letting agents about periodic tenancies, Mr Goodman believes they could make tenants stay longer.

He said: “Periodic tenancies are making people nervous about churn, but I think the opposite will happen in reality. With supply and demand where it is, tenants are going to want to stay put. We’re moving toward something closer to the German model, people renting for years, not months.”

He adds the key is for letting agents to communicate with their landlords ahead of the changes.

He said: “May 1st 2026 will expose who has and hasn’t done the work: the ones who trained their teams on Section 8, built out Section 13 workflows, and communicated clearly with landlords, will come out on top. Next year, preparation will pay off.”