In short: It’s a cluster of pressures rather than one villain: Section 24’s tax treatment, EPC upgrade cost uncertainty, the administrative and control burden of the Renters’ Rights Act, higher mortgage rates on refinancing, and fear of a Capital Gains Tax rise all feed into the same decision. Recent survey data suggests the sharpest, most immediate drivers are actually financial, remortgaging onto higher rates and the urge to lock in gains before any CGT change, running neck-and-neck with, and arguably now ahead of, the regulatory fear that dominated the headlines a few years ago.
The pressures, one by one
Section 24 (mortgage interest relief restriction). Since it fully phased in, landlords with mortgages can no longer deduct finance costs from rental income before calculating tax, instead they get a flat 20% tax credit on interest paid, regardless of their tax band. For a higher-rate taxpayer with significant borrowing, this can push what looks like a real loss on paper into a taxable profit, because tax is calculated on turnover-minus-costs-excluding-interest rather than genuine cash profit. This remains one of the most-cited grievances among leveraged landlords, and it isn’t going away, if anything, the Autumn Budget 2025’s plan to raise property income tax rates by two percentage points from April 2027 compounds the same underlying problem: tax charged on income that increasingly doesn’t reflect real profit once financing and compliance costs are accounted for.
EPC upgrade cost uncertainty. The Warm Homes Plan, confirmed in January 2026, sets a firm deadline of 1 October 2030 for all private tenancies to reach a minimum EPC Band C, with a cost cap around £10,000 per property and much larger fines for non-compliance than before. Around half of privately rented homes in England currently sit below Band C. The genuine fear here isn’t really the deadline itself, landlords have had years of warning, it’s the moving target: the metric itself is being overhauled (measuring heat retention rather than raw energy use), meaning many landlords don’t yet know exactly what work their specific property will need or what it will cost until the new methodology is finalised. Uncertainty about a potentially five-figure bill on an older or solid-wall property is a legitimate source of anxiety, especially for landlords with thin margins or properties that are hard to treat (flats without lofts or external wall access, listed buildings, etc.).
Renters’ Rights Act compliance and loss of control. Since Section 21 was abolished in May 2026, ending a tenancy now requires using a specific Section 8 ground, meeting notice periods, and, for grounds like selling or moving in, being able to evidence genuine intent and observing restrictions on re-letting afterwards. Add in the new digital Private Rented Sector Database, the incoming Ombudsman/redress scheme, restrictions on rent increases and bidding wars, and the shift to periodic-only tenancies, and many landlords describe this less as fear of any single rule and more a diffuse sense that they’ve lost the ability to make simple, fast decisions about their own asset. That loss-of-control feeling is real and shouldn’t be dismissed, but it’s also the pressure most within a landlord’s control to adapt to, through better process and documentation (see our guide to succeeding as a landlord in 2026).
Mortgage rate rises. Many landlords fixed rates in the low-rate years before 2022 and are now rolling onto materially higher pay rates as those deals mature. Survey tracking in 2026 has shown a rising share of landlords expecting to remortgage within the next twelve months, and for a portfolio bought on thin yields, a jump in mortgage cost can turn a comfortably profitable let into a marginal or loss-making one overnight. Unlike regulatory change, this is a hard cash-flow number landlords can calculate precisely, which is likely why it consistently ranks as one of the very top reasons landlords give for selling.
CGT rate uncertainty. Ahead of successive Budgets, speculation has repeatedly swirled about whether Capital Gains Tax on residential property might be increased or aligned further with income tax rates. As of the November 2025 Budget, the specific residential property CGT rates (18% basic rate / 24% higher rate) were not directly increased, but the broader direction of travel, other CGT rates rising, other property taxes (like the BTL stamp duty surcharge, now 5%) going up, has been enough to convince a large number of landlords that “sell now, while I know the rate” is the safer bet than waiting. Recent landlord sentiment surveys have found this motivation running almost equal to the raw cost of higher mortgage rates as a reason to sell, a sign that anticipation of a future tax change is now doing nearly as much to drive exits as the change itself would.
Negative media and political rhetoric. Landlords consistently report feeling cast as the default villain in housing-crisis coverage. This is a real morale factor and shouldn’t be minimised as “just noise”, sentiment surveys have repeatedly shown landlord confidence at or near record lows even as underlying fundamentals (occupancy, rent growth, arrears) have in some respects held up reasonably well. But rhetoric alone rarely forces a sale; it lowers the threshold at which a landlord facing one of the other, harder pressures decides “why bother continuing.”
Which of these are the biggest genuine drivers?
Weighing the evidence, the two hardest, most immediate drivers appear to be financial: refinancing onto higher mortgage rates, and the urge to crystallise gains ahead of possible tax change. These show up in survey data as the top-ranked reasons landlords give for selling, running close together. Regulatory change (Renters’ Rights Act compliance, EPC costs) forms a real but slightly less immediate middle tier, it changes how landlords operate rather than necessarily making the sums not work. Circumstantial reasons, retirement, family need for cash, a tenant moving out anyway, consistently rank lowest, suggesting most exits are being actively decided rather than simply falling out naturally.
The overstated fears
Two things are probably more overstated than the headlines suggest. First, the idea that the Renters’ Rights Act makes it impossible to ever get your property back, it doesn’t; it makes the process more procedural and documentation-heavy, not impossible, provided you use the correct ground correctly. Second, the idea that a CGT increase is inevitable and imminent, it’s speculation that has repeatedly not fully materialised at the rate rumoured, even as it drives real behaviour. Landlords selling purely to “beat” a change that may not happen, without weighing their own numbers, risk making a worse decision than the one they were trying to avoid.
Related reading
Sources
- Landlord Eye #05: landlord sentiment, welfare reform and tenant risk, NRLA
- Changes to tax relief for residential landlords: how it’s worked out, including case studies, GOV.UK
This is general information, not legal, tax, or financial advice. Figures and rules referenced are accurate to the best of available information as of July 2026 unless stated otherwise. Always check current guidance or consult a qualified professional before making decisions about selling or restructuring your property holdings.
Last Updated on September 21, 2026