Landlord sell-offs fall by almost half in a year

The proportion of homes coming to market that were previously rented has fallen by nearly half in the space of a year. That shift is significant for anyone running or buying HMOs - it changes the supply picture, the competition for stock, and the room rate trajectory.

What does the TwentyCi data actually show?

The latest Property & Homemover Report from data firm TwentyCi, published in April 2026, found that former rental properties' share of new listings dropped from 22.5% in Q1 2025 to 12.4% in Q1 2026 - a year-on-year fall of 45%. London recorded the sharpest decline at 51%.

The headline sounds positive for the private rented sector. But the detail is more sobering. Of properties sold in Q2 and Q3 2025, only 6% outside London were subsequently re-let, rising to 11% in the capital. That means the vast majority of those former rentals are being absorbed by owner-occupiers. The overall stock of private rental homes continues to shrink.

For HMO investors, this matters. Use our HMO valuation calculator to check how tightening supply is affecting the commercial value and room rate assumptions on any property you are analysing.

What does a slowing exodus mean for HMO landlords?

Less sell-off pressure across the wider market creates two distinct effects for HMO operators.

First, with fewer distressed landlords liquidating, the volume of genuinely motivated sellers at the cheaper end of the market - where many HMO conversions begin - may reduce. Acquisition competition could actually increase in sub-£200k terraced stock in cities like Manchester, Leeds, and Nottingham, all of which carry active Article 4 designations that limit where new HMOs can be created.

Second, shrinking rental supply keeps room rates elevated. Average rents across the market edged down 2% to £1,450 per month in Q1 2026 according to TwentyCi, but remain close to record highs. In shared accommodation, affordability is the binding constraint - the LHA rates map shows the postcode-level Local Housing Allowance (LHA) ceilings that define your floor on room rate viability in lower-income areas.

Is this a turning point or a pause?

Colin Bradshaw, chief executive of TwentyCi, said the market was "continuing to tick along nicely" despite global disruption, though he flagged initial cooling in London and the South East as fixed mortgage rates moved back above 5%. Buyer enquiries fell sharply in March 2026, and the Bank of England is holding rates rather than cutting amid inflation concerns.

TwentyCi expects around 1.2 million transactions in 2026, broadly in line with 2025. That stability matters for HMO investors who are stress-testing a refinance. Check your numbers against current interest coverage ratios using the BTL stress test calculator before assuming today's rate environment holds.

The Renters' Rights Act - which ends Section 21 no-fault evictions under the Renters' Rights Act 2025 - continues to loom over landlord sentiment. Some landlords who paused sell-off decisions are still waiting to see how enforcement plays out in practice before committing either way.

For a broader view of where HMOs sit relative to other strategies in this environment, the property investment strategies guide sets out the trade-offs in plain terms.

Key takeaways

• The share of former rentals entering the sales market fell 45% year-on-year, from 22.5% in Q1 2025 to 12.4% in Q1 2026 (TwentyCi, April 2026)

• Only 6% of sold rental homes outside London were subsequently re-let, meaning overall rental stock is still contracting despite the slowdown in sell-offs

• Average rents fell 2% to £1,450 per month in Q1 2026 but remain near record highs, supporting room rate income for existing HMO operators

• In Article 4 areas, new HMO supply is restricted by planning rules - check your local council's designation before acquiring conversion candidates

• Run a stress test on any refinance with rates back above 5% before assuming the supply tailwind outweighs the cost pressure