Study finds many properties change hands within the private rented sector, but more move into owner occupied housing
A notable share of rental homes sold by landlords does not immediately leave the private rented sector (PRS), according to new research from Pegasus Insight, although the wider pattern still indicates a tightening supply of properties available to let.
The mortgage market consultancy’s Landlord Trends Q4 2025 dataset shows that more than one in four landlords who disposed of property in the past 12 months sold with tenants already in situ. In those cases, the typical landlord sold an average of 1.8 properties with sitting tenants.
The findings also point to continued churn within the PRS. About three in 10 homes sold by landlords were bought by another landlord, suggesting that part of the stock is being retained as rental accommodation, even if ownership changes.
However, the research indicates that a larger proportion of sales is moving into owner occupation. Pegasus Insight reported that 34% of landlord disposals went to first-time buyers, while 29% were purchased by other residential buyers, implying that these homes are likely to be removed from the lettings pool.
Taken together, the data suggest that while some sales amount to a transfer within the PRS, the net effect still leans towards a gradual reduction in the number of rental homes.
“Landlord sales do not automatically mean a rental property disappears from the sector,” said Mark Long (pictured right), founder and director of Pegasus Insight. “In a meaningful minority of cases the property is simply being transferred from one landlord to another, and sometimes sold with tenants already in place.
“However, the overall direction of travel still points to a shrinking PRS. When a substantial proportion of landlord sales are going to first-time buyers or other owner occupiers, it inevitably reduces the pool of homes available for rent.
“Policymakers must recognise the cumulative impact of ever tighter regulation and rising taxation on landlords, particularly smaller operators. Many are deciding that the pressures and uncertainty are no longer worth it. This is significant because the PRS provides homes for around 20% of the UK’s households, so policy decisions affecting landlords ultimately have consequences for tenants too.”
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