Letting agents are being forced to rethink business models as landlords exit the private rental sector.

That’s the verdict following new research from PropTech firm iamproperty.

Agents reported a sharp landlord exit, with many anticipating a 71% reduction in buy-to-let investors in 2026, creating a shrinking pool of rental stock and placing increased pressure on letting businesses to adapt their strategies, services and skills. 

With fewer landlords entering the market and more selling up, letting agents report a “double-edged sword” – rising rental income alongside declining stock levels, making it harder to grow portfolios. 

One contributor to the report says: “It’s two steps forward, one step back. Rents rise, but stock just isn’t there.” 

The firm says agencies are reducing reliance on investor-driven volume and spending more time supporting owner-occupiers and needs-based movers, while reviewing staffing structures and future skills requirements. 

Agents are also growing fed up with red tape.

While agents support and are striving for higher standards for consumers across the entire property industry, only 26% feel optimistic about the regulatory environment. 

Agents linked the landlord exit to regulatory changes and uncertainty surrounding the Renters Rights legislation, with many reporting that landlords are choosing to sell ahead of new rules coming in. 

“We’re certainly seeing a lot of landlords selling up ahead of the incoming Renters’ Rights legislation and we totally get it,” one contributor notes. 

Alongside the reduction in investor activity, letting agents reported that the changing customer mix places greater emphasis on guidance, reassurance and hands-on support throughout transactions. 

The report highlights that this shift is pushing lettings agencies to evolve business plans, reassess growth strategies and diversify revenue streams as traditional landlord-led portfolio expansion becomes less reliable. 

Ben Ridgway, co-Founder at iamproperty, says: “Letting agents are navigating a significant shift in the market and it’s forcing agencies to rethink how they grow and operate. 

“At the same time, agents are adapting quickly, with many telling us they are changing their strategies, reviewing their customer focus and preparing for a different mix of business. 

“This report gives letting agents a clear view of how their peers are responding and where the market is heading.” 

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