In the run-up to May 1st, it's not just the Renters' Rights Act giving landlords something to think about
With rising interest rates pushing up the cost of mortgages, higher running costs and the Renters’ Rights Act, arguably there’s never been a worse time to be a landlord in the UK.
In fact, the biggest headache for landlords in 2026 is being hit by several different complications all at once, brokers tell Mortgage Introducer UK.
Dan Mules, director of Fitch & Fitch mortgage brokers in London, said landlords are currently "being squeezed from lots of different angles”, from higher finance costs to tighter tax treatment, and growing compliance measures. Ultimately, it comes down to profitability, or “more accurately the erosion of it”.
“Rising interest rates, seemingly relentless change in regulation, and higher running costs are all hitting at once, and for many landlords the sums simply don’t stack up like they used to," Mules said.
“However, they’re still expected to absorb the risk; ultimately the gap between effort and reward seems to have narrowed significantly.”
Fitch & Fitch is seeing a clear trend of landlords selling, particularly smaller and accidental landlords – those who have ended up letting property through circumstance rather than choice, typically with smaller portfolios.
It appears to reflect a general trend across the UK; last year, Milton Keynes-based property specialists TwentyEA revealed that 15.6% of UK homes for sale were previously rented, up from 9.8% in 2024. Around 35% of landlords have sold or attempted to sell a property in the prior 12 months, NRLA revealed in October.
Now, the “tipping point” for landlords deciding to sell is often when they are due to remortgage, as a low fixed rate is replaced with something materially higher.
Mules added: “Layer on tax changes and ongoing regulation, and that’s often the moment landlords decide it’s no longer worth it.
“It’s rarely one issue – most mention it’s the cumulative weight of everything hitting at once.”
Josh Quinn, operations manager at Response Mortgage Services in Leeds, agreed the “final straw” for landlords is rarely one single issue. He said: "It’s typically a refinance coming in at a much higher rate than expected, which then forces a proper look at the numbers alongside the ongoing regulatory changes.
“For many landlords – particularly accidental landlords – it’s no longer just about whether a deal works on paper, it’s whether the level of risk they’re taking on is still justified by the return.”
The obvious looming factor is the Renters’ Rights Act, which comes into play on May 1st and will further increase costs and regulations for landlords. It introduces more rights for tenants, including a ban on no-fault evictions, an end to fixed-term tenancies and tighter rules on rent increases.
According to Quinn, the Act’s changes are making landlords “increasingly unsure how much control they’ll have over their own property” – particularly regarding regaining possession.
“That uncertainty makes it harder to plan, whether that’s taking on a new purchase or refinancing an existing one," Quinn said.
“At the same time, higher interest rates have already reduced profitability, so there’s less room to absorb any issues if they arise.
“When you combine tighter margins with reduced flexibility and more regulation, it leaves landlords – especially accidental landlords – feeling exposed in a way they haven’t previously.”
Nicholas Mendes, mortgage technical manager at John Charcol in London, said the Act “adds another layer of restriction and process at a point where a lot of them already feel squeezed from every direction”.
"The Act is not the only pressure point, it is another one landing on top of an already stretched part of the market," Mendes said. "Mortgage costs are higher, margins are tighter, repair and compliance costs have risen, and tax changes have already taken a toll."
When May 1st arrives, landlords will need to be more confident on the rules, more careful on how they manage tenancies, and prepared for things taking longer to sort out when problems arise, Mendes added.
“For smaller landlords especially, that is a real shift," he said. "Many are not operating with big teams or specialist compliance support behind them. They are just trying to make the numbers work, and this makes that more difficult.”
Ultimately, brokers, lenders and other industry figures can help landlords “with more realism and more flexibility”, according to Mules.
“Landlords don’t need more friction – they need lenders who understand complex portfolios, take a pragmatic view on affordability, and can move quickly," he said.
“Brokers also have a responsibility to be upfront, stress-test deals properly, challenge assumptions, and help landlords plan ahead.
“Those who adapt will keep clients; those who don’t will lose them.”
Quinn added: “Ultimately, both brokers and lenders have a role in helping landlords adapt. The more clarity, flexibility, and practical support that’s provided, the easier it is for landlords to make informed, long-term decisions.”
