Should Older Landlords Exit the PRS After the Renters' Rights Act?

What changed on 1 May 2026

The Renters' Rights Act removed Section 21 — the so-called "no-fault eviction" mechanism — for all tenancies as of 1 May 2026. Any Section 21 notices that had not been served by 30 April 2026 are now invalid. Court applications using existing notices must be lodged by 31 July 2026.

All assured shorthold tenancies have automatically converted to periodic tenancies with no fixed end date. Landlords wishing to recover possession for the purpose of selling the property must now serve a new Ground 1A notice — with a minimum four-month notice period — and demonstrate a genuine intention to sell.

The practical effect is that landlords have less flexibility than before. Regaining possession takes longer and requires documented grounds. For landlords who had already been weighing an exit, this has brought the decision forward.

The scale of the landlord exodus

The trend was already underway before May 2026. According to an NRLA survey conducted in early 2026, 41% of landlords indicated an intention to sell within a year — up from 19% the previous year. The pace of exit accelerated visibly: over 700 rental homes were listed for sale per day at the peak, and an estimated £48 billion has been removed from the rental sector's investment base since the legislative changes began to be anticipated.

93,000 buy-to-let landlords exited the private rented sector in 2025 alone. The 2026 figure is expected to be higher.

This is not a cohort of professional investors deploying capital into the next asset class. A significant proportion of those leaving are older individuals who accumulated a second property — an inherited home, a flat bought in the 1990s, a property kept when they moved — and have held it for decades. For many, the rental income has formed part of their retirement plan. Selling changes everything about how that retirement plan works.

The "accidental landlord" profile — and why the decision is complex

The typical older landlord now reconsidering their position is not a portfolio investor. They may have one property. They may have held it for 20 or 30 years. The property may have significant capital gains tax exposure on disposal. The rental income — even modest — may supplement a pension in a way that matters to their monthly budget.

Questions they are facing include:

• How will I replace the rental income after I sell?
• What are the capital gains tax implications of a sale in 2026?
• Should I sell now, or wait to see whether the market improves?
• Does selling the rental property affect what I need from my primary residence?

None of these questions has a universal answer. But all of them are worth exploring with a specialist who understands later-life financial planning — not just conveyancing.

How equity release on your primary home fits the picture

For some older landlords, the decision to sell the rental property creates an income gap. The proceeds from the sale could release equity release or a lifetime mortgage on the primary residence from redundancy — but there is an alternative framing.

Equity release on a primary residence could, in some cases, provide flexible income where the rental income previously did. A drawdown lifetime mortgage, for example, could release funds in stages — matching outgoings as they arise rather than taking a large lump sum upfront. Interest rolls up, but no monthly repayments are required.

Alternatively, some homeowners use the capital from a rental property sale to partially reduce an existing mortgage or fund retirement goals, while equity release on the primary home provides ongoing flexibility. The two decisions — selling the rental and any later-life lending on the primary home — are distinct but interact. Proper advice considers both together.

All equity release recommendations from Verity Home are based on FCA-regulated advice, given on a whole-of-market basis, with no obligation to proceed.

What to think about before deciding to sell

Selling a rental property held for decades is rarely straightforward. Key areas to consider before making a decision:

• Capital gains tax: The gain since original purchase (or probate value if inherited) is potentially subject to CGT. The annual exemption is currently £3,000. Tax-efficient structuring — phased disposal, spouse/civil partner transfers, using losses — should be explored before exchange of contracts.
• Income replacement: Map out what the rental income funds in your monthly budget. What happens to that gap after sale? Pension drawdown? ISA withdrawals? Equity release on the primary home? All are options, each with different tax and estate-planning implications.
• Timing: The Renters' Rights Act does not require you to sell. If you have a good tenant on a fair rent, you can continue to let on a periodic tenancy. The question is whether the commercial rationale still holds, given your age and retirement horizon.
• FCA-regulated advice: If equity release on your primary home is part of your thinking, it must be recommended by an FCA-authorised adviser. Verity Home provides this — on a whole-of-market basis, with no pressure to proceed.

Taking a considered approach

The Renters' Rights Act has created pressure for older landlords to act. But pressure is not a plan. The homeowners who navigate this well are those who assess the full picture before making a decision: the tax position, the income replacement strategy, the role of their primary home in their retirement plan, and the timing of any later-life lending alongside a potential property sale.

Verity Home specialises in exactly this intersection — later-life lending decisions that sit alongside other significant financial changes. If you are considering selling a rental property, we can help you model how equity release or a lifetime mortgage could complement or replace the income it provided.