Small Landlords on the Brink: Government Policies Are Driving Us Out of the Market

Press Release

Nick Neale – Landlord and Estate Agent

I’ve been a landlord and estate agent in England since 1999—way before buy‑to‑let mortgages were even a thing on the high street. Back then, financing came exclusively from commercial lenders. I’ve seen this sector evolve, and I’ve stuck with it out of a genuine desire to provide stable homes—not chase gains. From the beginning, I’ve always had to hold down a job alongside being a landlord—the profit from rental income, after all expenses, has never been enough to live on alone. Like many in my position, I hoped that one day I’d either retire with a reasonable rental income or sell up and crystallise the gain I’d built over years of hard work and risk. That was the plan—but the way things are going, it’s a plan that’s fast becoming impossible.

The assured shorthold tenancy (AST), introduced by the Housing Act 1988 and made the default tenancy in 1997, was designed to offer much-needed flexibility and reassurance to landlords—especially at a time when the private rented sector was still recovering from years of overregulation and underinvestment. It was a deliberate shift in policy, recognising that for the sector to grow, landlords needed confidence they could regain possession of their property when necessary. For over two decades, this framework has underpinned the steady expansion of the private rental market, balancing tenant rights with landlord protections. Yet now, through the Renters Reform Bill, the government is effectively dismantling that legal structure—abolishing Section 21 “no-fault” evictions and replacing fixed-term tenancies with open-ended agreements. It feels like a complete U-turn, undermining the very principles that encouraged thousands of small-scale landlords like me to invest in the first place. The system that once promised clarity and security is now becoming a legislative minefield.

I’ve managed properties—for myself and my clients—for over two decades. Yes, a small minority of tenants can act irresponsibly and cause chaos—from damage to rent arrears—impacting letting agents, landlords, courts, Citizens Advice, local councils, and beyond. But it’s that one-off few, not the thousands who consistently pay on time and care for their homes.

Yet, we landlords still bear the brunt of all the red tape—from Section 24 mortgage tax relief changes to EPC mandates, selective licensing, and the Renters’ Reform proposals.

The Eviction Process—A Case of Bureaucratic Slog

Let me walk you through a real-life scenario, built into our business model:

1. A tenant falls behind on rent—Section 8 under the Housing Act 1988 applies, but only after two months’ arrears.
2. A 14-day notice is served. If the tenant doesn’t pay, you issue a possession claim—forms N5 and N119 as per GOV.UK guidance.
3. Then we wait. Courts are backed up—2025 timelines show 6–9 month waits for hearings.
4. If possession is granted, bailiff scheduling adds another 4–6 weeks or more.

By the time the dust settles:

• 9 months’ rent or more is unpaid.
• Court fees and legal costs, easily running into thousands.
• The property needs refurbishing before it can be re-let.

The landlord shoulders every risk, every cost, every delay.

No one talks about the mental health of landlords—the stress of legal delays, dealing with damage, or being unable to access your own property. We’re parents, carers, working professionals. We’re not corporations—we’re your neighbours. And we’re being regulated out of the sector.

Legislative Pressures Mount

Let’s lay it out:

• Renters’ Reform Bill: abolition of Section 21, mandatory periodic tenancies, new Ombudsman, and property portal.
• EPC C upgrades: costs of up to £6,000 per property to save tenants £350 a year.
• Selective Licensing: average £700 per property, with some councils charging over £1,200.
• Rental income taxed as earned income; no relief on mortgage interest.
• National Insurance now payable on rental profits.
• Interest rate increases: higher monthly costs for mortgaged landlords.

These aren’t small tweaks. They are systemic pressures, chipping away at landlord viability year after year. Tenant advocacy groups often cite disrepair and maintenance as key failings of private landlords. But here’s a question no one seems to ask: if the future of the sector is filled only with properties that meet an ever-higher compliance bar, who will tenants actually rent from? And will they treat those homes with the care required to preserve that standard?

In many cases, we see disproportionate deterioration in rental properties—not because of neglect by the landlord, but due to how some tenants live in them. I’ve seen examples on streets with ten identical terraced houses: the two rentals show signs of damp while the eight owner-occupied ones don’t. It begs the question—is it really about the structure of the home, or the way it’s lived in? The reality is that maintenance is a two-way street, and the landlord often bears the entire burden, regardless of tenant behaviour. And it’s not just legislation—many landlords are now choosing to exit the sector entirely or switch to short-term lets via platforms like Airbnb, where regulation is lighter and returns are higher. This shift is directly reducing the supply of long-term rental housing. In addition, the 5% stamp duty surcharge on second home purchases has become a major barrier for new and existing landlords looking to invest in rental properties, further discouraging growth in the sector. The inevitable result? A shrinking supply of rental homes and rising rents.

The more landlords are driven out, the tighter the market becomes—and as availability falls, rents will rise sharply, leaving tenants worse off. This is not speculation. It’s basic economics.

And here’s the bigger picture: 19% of private renters claim housing benefit, which is funded by the government—and ultimately by the UK taxpayer. As landlords exit, remaining properties become more expensive, and the burden on the state increases. These policies don’t just punish landlords—they inflate the housing benefit bill, shifting the cost to the public purse.

Private landlords currently house over 4.6 million households in England—19% of the population. Without us, the housing system collapses. Yet we’re being treated like the problem.

A Two-Tier System Emerging

It’s the small landlords—the ones with 1 to 3 properties—who are being hammered. Larger build-to-rent companies, corporate landlords, and institutional funds benefit from economies of scale, tax structures, and political favour. The playing field isn’t just uneven—it’s rigged.

Meanwhile, the very people we house will pay the price.

To tenants reading this: we’re not your enemy. Many of us keep rents fair despite our costs soaring. But if landlords leave the market, your rent won’t go down. It will go up. Your choice of homes will shrink. Your security won’t improve. You’ll just be left with fewer landlords and less power.

The Bigger Picture

We reach a tipping point. You stop expanding your portfolio. Some of us are already selling. Properties sit empty because landlords would rather exit than continue under these conditions.

And the idea that landlords are wealthy is nonsense. Most of us ride out the market over decades. We manage arrears, absorb legislative change, pay tax on paper gains we can’t spend, and deal with repairs, compliance, inspections, and court battles.

And when we sell? Capital gains tax. No easy exit. No free ride.

If this continues, what happens?

• Fewer homes to rent
• Higher rents
• More homelessness
• Overcrowding
• Strained councils

This isn’t hypothetical. It’s happening now.

A Final Word

The private rented sector didn’t collapse because of bad tenants or bad landlords. It’s collapsing under the weight of bad policy.

Successive governments have treated landlords as politically expendable, and tenants will be left to deal with the consequences. If the aim is to eliminate small landlords, fine—say so. But be honest about what comes next.

Councils aren’t building. Housing associations aren’t building fast enough. And private developers can’t fill the gap alone.

Without landlords like me, where exactly is everyone meant to live?