Industry experts warn that small landlords are vanishing, while big corporate and institutional landlords are buying up private rented homes—especially in London—often to lease them back to councils as expensive temporary accommodation.
At the Housing 2025 conference, Southwark Council’s Hakeem Osinaike said around 40% of London’s private rental stock has disappeared.
Experts blame pressures from the Renters’ Rights Bill and its predecessor the Renters Reform bill for driving small landlords out, shrinking the private rented sector and pushing more families into costly temporary accommodation, worsening the housing crisis.
George Osborne’s policy stopping landlords from offsetting mortgage interest was disastrous. Small landlords got hammered while big corporate landlords carried on, protected by loopholes and clever accountants. Labour hasn’t been any better. The SNP imposed punishing rent controls in Scotland, and Labour’s Renters Reform Bill looks set to push small landlords out altogether.
If you earn over £50,000 gross as a landlord — which is easy if you’re topping up a pension or benefits — you could get hit with 40% tax.
The government wants properties upgraded to EPC band C or above, forcing landlords to pour in cash which private landlords may not be able to deduct from profits as a capital investment. If they increase rent to recover costs and/or stay profitable they risk being pushed into the 40% tax band, making it even more difficult to be profitable/worth their while.
Two of the options they have once they reach the threshhold is to raise rent even more or quit the sector. And who benefits? Certainly not tenants.
Some landlords are fleeing to Airbnb, where they face less risk of being stuck with long term non paying tenants they cannot evict, and where they make more money. Others are eyeing guaranteed contracts with Serco to house asylum seekers — anything to avoid having to evict problem tenants using Section 8 through court systems that are hopelessly slow.
Stopping small landlords from offsetting finance costs, while letting big corporations do it, has wrecked competition and driven rents sky-high. And nobody has introduced proper incentives for landlords to invest in energy efficiency.
All the main parties have failed both landlords and the tenants who suffer as a result of the ever shrinking PRS.
Here’s what urgently needs investigating by the Competition and Markets Authority:
- Osborne’s tax policy, which unfairly favours big landlords over small ones.
- Serco contracts that swallow up housing that used to be for families or the homeless.
- The broken courts system that makes letting to families too risky.
- How killing mortgage relief for small landlords jacks up rents and kills housing supply.
- The lack of tax breaks for energy-efficient upgrades.
- Punishing landlords for trying to raise capital for improvements.
- The looming ban on letting anything below EPC band C — a potential disaster for housing supply.
If governments don’t stop attacking small landlords while giving big corporations a free pass, the housing crisis will only get worse — for everyone.