How the Renters' Rights Act is shaping landlords' decisions to sell or hold

How the Renters' Rights Act is shaping landlords' decisions to sell or hold

The introduction of the Renters' Rights Act on 1 May 2026 changed not only how tenancies work but also the calculation behind whether to sell an investment property. The shift is clearest in a specific rule that has received less attention than the headline changes: a landlord who uses Ground 1A, the possession ground for sale, cannot re-let the property until twelve months after the date specified for possession in that notice - in practice, a restriction that can run to around sixteen months from the date the notice was first served. That restriction is now shaping sell-or-hold decisions across the sector in a way the pre-Act environment did not.

What Ground 1A requires, and what happens if a sale falls through

Ground 1A is the lawful route for a landlord who genuinely intends to sell to regain possession from a tenant. Official guidance for landlords confirms the requirements: at least four months' notice must be given, the tenancy must have been running for at least twelve months before the notice takes effect, and the landlord must genuinely intend to sell. These are workable requirements for landlords who are committed to a sale and have a realistic prospect of completing one.

The more commercially significant element is what happens when a sale doesn't complete. Analysis of rental properties marketed for sale in 2025 found that 51% did not sell, rising to 60% for flats.

Under Ground 1A, a landlord who has served notice, regained possession, and then saw the sale collapse cannot return the property to the rental market for the length of the restricted period. It sits empty and unlet, generating no income, for the better part of a year and a half.

That prospect is what has made some landlords, particularly those with lower-value properties or flats where sale-fall-through rates are highest, more hesitant about triggering the possession process even when they are genuinely considering selling.

The case for holding: what the rental market data shows

For landlords weighing whether holding makes more sense than selling right now, the rental market data offers useful context. Zoopla's June 2026 Rental Market Report puts average UK rents at £1,321 a month, up 2.1% year-on-year, with supply still 25% below pre-pandemic levels nationally. Rental demand remains structurally supported by the barriers to homeownership, which are unlikely to ease quickly. These are the conditions underpinning the income argument for holding well-located properties with reliable tenants.

NRLA survey data from its Q4 2025 Landlord Eye report found that single-property landlords were considerably more likely to say they didn't expect to remain in the sector than landlords with larger portfolios. The compliance burden of the Renters' Rights Act tends to fall harder on landlords managing one property alongside other commitments, whereas portfolio operators who have systematised their compliance are often in a materially different position.

The case for selling: an active market for tenanted stock

For landlords who do decide to sell, and where the plan is realistic, the market for tenanted properties is more active than it has been for several years. Recent figures put the share of homes bought by landlords across Great Britain at 13.3% between January and April 2026, the highest since early 2016 with a record 23% of homes bought by landlords in that period having previously been let, up from 16% in 2025. Portfolio landlords and limited company operators are actively acquiring tenanted stock from exiting landlords.

The NRLA's own Q4 2025 survey reflects the same trend from the seller's side: 41% of landlords said they were likely to sell at least one property within the year, more than double the 19% who said the same twelve months earlier.

For a landlord who wants to sell, understanding that an active buyer pool exists for properties with tenants in situ, and that this route avoids the Ground 1A process and its re-letting restriction entirely, is commercially useful information.

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