One in three landlords are considering leaving the PRS, according to research from Aldermore.
A survey of 500 landlords found 31% are considering exiting the sector due to economic and regulatory challenges.
The lender found higher maintenance costs and increased regulation, such as the upcoming Renters Rights Bill, were the main motivating factors driving landlords to divest.
Many in the sample have already been driven to sell properties, with 29% having already done so in the past 12 months.
This removal of supply in the PRS is continuing to drive up demand, with 49% of landlords reported an increase in tenant inquiries.
Landlords are already wary about the impacts of this with 69% telling Aldermore a reduction in choice would negatively impact the quality of remaining properties.
Aldermore also surveyed tenants, gaining insights from a sample of 2,000.
The majority of these (70%) revealed they were competing against more people when looking for properties, with 27% having to move due to their landlords divesting.
Despite this direction of travel, 66% of tenants reported as having a positive experience with their landlord.
Additionally, over a quarter of landlords considering leaving the PRS admitted being fatigued around what they saw as an anti-landlord rhetoric.
“Looking ahead, we must ensure that the private rental sector remains a viable environment for landlords to operate in, as a continued exodus will place greater strain on an already stretched sector, further impacting tenants,” said Jon Cooper, director of mortgages at Aldermore.
“Aldermore welcomes the government’s efforts to increase transparency within the sector and recognise the role that good landlords play through the Renters’ Rights Bill, but this must be done in a way that is proportionate and does not create undue additional strain on landlords.”
