Savills said this was equivalent to around 697 rental properties each day, and a 9% rise on the number of previously let homes put up for sale over the same period last year.
Compared to 2024, this was a 28% increase.
Savills’ data said the trend was more pronounced in London, where former rental properties accounted for 30% of all new sale instructions, compared to 13% across the rest of Britain.
Lucian Cook, head of residential research at Savills, said: “For many landlords, the Renters’ Rights Act has become a clear point at which to reassess their investment. This has been compounded by fixed rate mortgages coming to an end and wider regulatory pressures, including higher minimum energy-efficiency standards.
“Together, these factors are driving a more fundamental review of whether rental property still stacks up, particularly for smaller, mortgaged landlords.”
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He added: “We’ve seen a notable increase in Section 21 notices being served, often as a way for landlords to test achievable rents in the open market. However, we would also expect this to translate into more sales over the coming months.”
Landlords leaving the London rental market
Separate insight from Investec found that nearly half – 49.9% – of all homes listed for sale in London in Q1 2025 had been rental properties at some point in the last three years. This was up from a share of 32.4% in Q1 2024.
The data pointed to a potential drop in rental supply, as in Q2 and Q3, just one in 10 properties that were purchased were re-let.
Mandeep Dhillon, private banker at Investec, said: “London rental market data shows that stock levels are falling as many properties sold are not returning to the rental market. That should help support demand for landlords who remain invested in the sector. While the end of fixed-term contracts could make rental income feel less predictable at first glance, it may also increase the length of some tenancies as more occupants seek stability.
“We are seeing well-capitalised landlords and property entrepreneurs acquire additional units as some part-time landlords exit the market. Typically, these clients have the administrative support and established processes to manage increased regulation, while diversified portfolios help spread income risk across multiple units.”
A seventh of disposed rental homes return to landlords
Savills assessed whether the former rental homes listed for sale changed tenure and found that 14% were purchased by other landlords, effectively keeping them within the private rental sector.
Cook added: “Looking ahead, refinancing and tenants choosing to move on are likely to become the main sale triggers.
“But with a significant number of homes returning to the rental market under new ownership, it is not just about shrinking supply, but a broader restructuring of the market towards a smaller more committed pool of professional landlords.”
