Hamptons July 2026: landlord purchases (10.2% of all UK buys) overtook landlord sales (9.2% of listings) in June for the first time since 2019. The sell-off is slowing not because conditions improved, but because Ground 1A turns a failed sale into a 12-month void with no re-let option. Up to 100,000 homes would have been caught in that position in 2025 alone.
What Has Happened?
Hamptons published its June 2026 rental market analysis on 13 July. The lettings agency tracks landlord purchasing and selling activity using its own transaction data combined with property listing records. The headline finding: landlords accounted for 10.2% of all UK residential property purchases in June 2026. Properties previously rented within the last five years made up 9.2% of all homes listed for sale in the same month. This is the first occasion since October 2019 that the landlord buy-side share has exceeded the sell-side share on those two metrics.
The context matters. The buy-side figure has not risen materially year on year. What changed is the sell-side. A year ago, previously rented homes represented 11.3% of all listings. By June 2026 that fell to 9.2%. The sustained wave of landlord exits that dominated coverage of the private rented sector since at least 2023, driven by Section 24, the SDLT surcharge increase to 5% in April 2025, and anticipation of the Renters' Rights Act, is now clearly decelerating.
Hamptons attributes the slowdown directly to Ground 1A of the Renters' Rights Act, in force from 1 May 2026. Ground 1A is the statutory possession route for a landlord who wants to sell a tenanted property with vacant possession. Once a landlord serves the notice and the tenant vacates, the landlord faces a mandatory 12-month prohibition on re-letting the property if the sale falls through for any reason. The rule was designed to prevent landlords using a claimed intention to sell as a mechanism to evict tenants and then simply re-let. The practical consequence is that serving a Ground 1A notice in a slow market now carries a significant downside risk.
To quantify that risk, Hamptons modelled the rule against 2025 transaction data. Of all homes listed for sale by landlords last year, 51% failed to find a buyer and complete. For flats, the failure rate was 60%. Had Ground 1A been in force throughout 2025, each of those failed sales would have triggered a 12-month prohibition on re-letting. Hamptons puts the total number of properties that would have been caught at 80,000 to 100,000: homes that could be neither rented nor sold, generating no income for their owners for up to a year.
The geography is concentrated. In London, previously rented homes made up 20.3% of all properties listed for sale in June 2026, more than double the national average. In the South East, the figure was 9.5%. Every other region sits close to the national average of 9.2%. London's concentration reflects the specific economics of the capital: entry prices high relative to achievable rents, heavy exposure to Section 24 for higher-rate taxpayers, and a flat-heavy stock profile where sale failure rates run at 60%.
Why This Matters to UK Property Investors
For landlords weighing an exit, the practical implication is that what looked like a routine decision 18 months ago now carries a serious tail risk. A landlord in Croydon or Lewisham with a tenanted two-bedroom flat, who has decided to sell, needs to think carefully about what happens if they serve a Ground 1A notice, the tenant vacates in August, and a buyer pulls out in November after survey concerns. The property cannot return to the rental market until August 2027 at the earliest. Mortgage payments continue. The property sits empty through the winter. The financial cost of a void under these conditions is categorically worse than a standard tenancy void, where re-letting is unrestricted.
On the buying side, the Hamptons data identifies a vendor cohort that will grow through 2026: landlords who have already served Ground 1A notices and experienced a failed sale. These sellers face very limited options. They cannot re-let. They carry holding costs on an empty property. The only clean exit is completing a sale. That combination produces the most motivated vendor profile in the BTL market. A buyer with cash or fast-access finance who can complete in four to six weeks is offering something that no Rightmove campaign can replicate: certainty of exit. Vendors in that position price for it.
The rental supply consequence runs against what the regulation was designed to achieve. Landlords holding back from serving Ground 1A, because of the void risk if the sale fails, are staying in the market without committing to it. They are not selling. They are also often not investing in improvements or re-letting at market rate on new terms. At the same time, landlords who would previously have re-let after a failed sale are now legally barred from doing so. Average rent on newly let homes reached £1,392 per month nationally in June 2026, up 1.6% year on year. RICS June 2026 data showed tenant demand at a net balance of +18%, the strongest reading since May 2025. The supply-demand gap in rental property is not easing. Anything that prevents formerly rented homes re-entering the lettings market tightens it further.
For investors who already own rental property in northern and Midlands markets, this is a structural tailwind. The reduction in competing supply supports both occupancy and rent levels. Fleet Mortgages' Q2 2026 data put North East average BTL gross yields at 9.2%. Nationwide's June 2026 house price index recorded North East annual growth at 9.9%. That combination of income and capital appreciation is happening partly because the supply constraint the Ground 1A rule is creating at the top of the market ripples through the whole system.
The Risks Investors Need to Understand
For landlords considering using Ground 1A to achieve vacant possession, the 60% flat failure rate is the number that should give most pause. That is Hamptons' national figure for 2025. In specific submarkets, particularly London flats in the £280,000 to £450,000 bracket where mortgage stress has reduced the active buyer pool, the failure rate could be higher still. An investor who serves Ground 1A on a flat in Lewisham, loses the tenant, and then cannot find a buyer is in a difficult position. The 12-month ban runs from the notice date, not from the date the property becomes vacant. Time spent marketing eats into the available window. A notice served in June, with the tenant leaving in September, leaves the owner marketing through winter and into spring 2027 before the re-let ban lifts. A buyer who pulls out in November after a survey does not restart the clock.
The financial arithmetic of a Ground 1A void is worth running precisely. On a property with a monthly mortgage payment of £800 and a previous monthly rent of £1,000, a 12-month void costs approximately £9,600 in lost rent income plus £9,600 in mortgage payments. That is £19,200 before maintenance, insurance, and the ongoing cost of maintaining an empty property in a secure and compliant condition. Against a flat bought for £250,000, that is around 7.7% of the purchase price spent on a void triggered by a failed sale. It is the kind of cost that erases the annual net return on a moderately leveraged investment in a single year.
The political direction of travel adds a longer-term dimension to the Ground 1A risk. Generation Rent, which has been the most influential tenant advocacy group in the development of rental legislation, has stated publicly that the Renters' Rights Act is "only a first step" and has set out a wish-list of further reforms. These include extending the Ground 1A relet ban beyond 12 months and strengthening enforcement against landlords who breach it. The current position could tighten. Investors planning an exit strategy that relies on Ground 1A within the next two or three years should factor in the possibility that the rules they are planning around are not the final version.
The London concentration of the landlord sell-off also carries a risk that is less visible in the national data. The 20.3% of London listings that are ex-rentals represents a significant volume of property (mostly flats) in a market where flats are already difficult to sell. If a meaningful share of those properties fails to find buyers, and subsequently cannot return to the rental market under Ground 1A, London faces a paradoxical reduction in available rental stock at a time when rental demand in the capital remains elevated. That is bad news for London tenants. For investors active in London who are looking to acquire motivated-seller stock, it also means the vendor cohort is more complicated than it first appears: some of those landlords are already inside a Ground 1A prohibition period, which changes what you can do with the property after purchase.
Where the Opportunity Could Be
The transaction structure that avoids the Ground 1A problem entirely is the tenanted sale. This is a sale where the buyer takes over the property with the existing tenancy in place. The tenancy does not end at completion. The seller does not need to serve Ground 1A because vacant possession is not being delivered. No notice period, no 12-month relet ban, no void risk. For a landlord who wants to exit cleanly and has not yet served a Ground 1A notice, the tenanted sale removes the regulatory trap. For a professional investor on the buy side, it is a route that most retail buyers will not consider (they want vacant possession) but that experienced portfolio investors complete routinely.
Landlords who are motivated to exit but have not yet served Ground 1A are the best candidates for tenanted sale negotiations. They have identified the problem (they want to leave) without yet triggering the risk (the 12-month clock has not started). An investor who approaches them with a realistic offer for the property with the tenant in place is offering genuine value: a clean exit. The discount to vacant possession on a tenanted sale typically runs at 5% to 15%, depending on the tenant's profile, the rent level relative to current market, and the remaining notice terms. That discount is an acquisition benefit for the buyer and a certainty premium for the seller.
Landlords who have already served Ground 1A and experienced a failed sale are a different cohort and the most motivated vendors in the current market. They cannot re-let. They are carrying an empty property with ongoing costs and no income. Every week that passes costs them money. A buyer who can complete quickly and cleanly, without a chain, takes the clock pressure away. Buyers in this position can often negotiate a price that reflects the vendor's circumstances rather than the theoretical market value of the property. The 80,000 to 100,000 homes that Hamptons models as potentially affected are not all in this position yet (the rules only came in May 2026), but the pool of motivated sellers in this specific situation will grow through 2026 and into 2027 as early Ground 1A notices run into slow sales.
In the north and Midlands, the supply tightening from Ground 1A deterring landlord exits reinforces the income case for holding well-maintained rental stock. Average rent on newly let homes is at £1,392 per month and rising. In Sunderland, Sheffield, and Stoke-on-Trent, two and three-bedroom terraced houses at £90,000 to £130,000 produce gross yields above 7%. The number of homes circulating back into the rental market from exiting landlords is falling. For investors who are already holding, that supports occupancy rates and rental income. For investors looking to acquire, it means the entry window for a given price-to-rent ratio keeps narrowing as northern house prices continue to outpace general inflation.
Arsh's Investor View
I want to be direct about what the Hamptons number actually shows. The fact that landlords bought more than they sold in June 2026 is not a BTL recovery story. It is a measure of how much more difficult the Renters' Rights Act has made it to leave the market. Landlords who would have sold are now sitting tight, not because conditions improved, but because they have looked at the Ground 1A void risk and decided the downside of a failed sale is worse than the status quo. That is rational. It is also not a sign of confidence.
The 60% flat failure rate is the figure I keep returning to. If you own a tenanted flat in London and you are considering serving Ground 1A to get vacant possession, you need to genuinely believe your specific flat is in the 40% that will sell, in a market that has been difficult for two years, at a price that covers your outstanding mortgage and acquisition costs, within the Ground 1A window, without a sale falling through. Most flats are not in that position. The investors I see getting into trouble are those who have served the notice because they feel emotionally committed to exiting and then discovered that their buyer pool is thinner than the marketing promised.
My view on the tenanted sale route: it is genuinely underused. I have done a number of landlord-to-landlord transactions over the years. The price is lower than vacant possession. That is the whole point. But for a seller who does not want to take Ground 1A risk and for a buyer who wants motivated-vendor pricing on a tenanted property with immediate income from day one, it works well for both parties. The absence of the Ground 1A risk makes it the cleanest exit available to a landlord who has made the decision to leave but has not yet triggered the statutory process.
One thing this data does not tell us is how many landlords are currently inside a Ground 1A void period right now, having served the notice after 1 May 2026, lost their tenant, and then watched a sale fall through. That number will not show up clearly in any dataset for several months. By the time it does, the people who built the relationships with those vendors earlier will have already been through the acquisition process. The motivated-seller opportunity from Ground 1A failures is front-loaded: the landlords who moved fastest into Ground 1A after May 2026 are the ones most likely to be in difficulty first.
How Property Investor App Can Help
Property Investor App connects investors directly with landlords who are looking to sell tenanted properties, including through its network of sourcers and specialist estate agents who work specifically with portfolio landlords exiting the market. For an investor looking for a tenanted sale in London, where the concentration of motivated landlord sellers is highest at 20.3% of all current listings, PIA's deal feed surfaces opportunities from both listed and off-market sources. For buyers targeting landlords who have already served Ground 1A notices and experienced a failed sale, PIA's network includes the professional contacts who are most likely to hear about those situations before they reach Rightmove. On the finance side, PIA connects investors with specialist BTL mortgage brokers who arrange both standard BTL products and bridging finance for fast-completion acquisitions, which is the transaction structure that makes Ground 1A distressed-seller opportunities accessible to cash-light investors with pre-approved borrowing.
Key Takeaways
- Hamptons June 2026 data (published 13 July 2026): landlord purchases accounted for 10.2% of all UK residential property transactions, while previously rented homes made up 9.2% of all homes listed for sale. This is the first time since October 2019 that the landlord buy-side share has exceeded the sell-side. The driver is not increased buyer confidence but a fall in landlord selling, from 11.3% of all listings one year earlier to 9.2% in June 2026. The sustained landlord sell-off that dominated the market from 2023 onwards is decelerating because leaving the market has become riskier, not because holding it has become more attractive.
- Ground 1A of the Renters' Rights Act (in force from 1 May 2026) requires landlords who obtain possession to sell to accept a mandatory 12-month prohibition on re-letting if the sale falls through. In 2025, 51% of properties listed for sale by landlords nationally failed to find a buyer (60% for flats). Hamptons estimates 80,000 to 100,000 homes would have been caught in this regulatory limbo under the current rules: unable to sell, unable to rent, generating no income for a year.
- London has the highest concentration of landlord vendor activity in the UK. Previously rented homes made up 20.3% of all properties listed for sale in London in June 2026, compared with 9.5% in the South East and approximately 9.2% nationally. London landlords face the combination of lowest rental yields, highest mortgage costs, and a flat-heavy stock profile where the 2025 sale failure rate was 60%. The Ground 1A void risk is most acute in the London market.
- Landlords who have served Ground 1A notices and experienced a failed sale represent the most motivated vendor cohort in the current BTL acquisition market. They cannot re-let, cannot avoid ongoing holding costs, and their only clean exit is completing a sale. Cash buyers and investors with fast bridging finance who can offer certainty of completion are in a strong negotiating position with these vendors. The pool of sellers in this position will grow through 2026 as notices served after May 2026 run into the same difficult sales market.
- The tenanted sale (selling with the existing tenant in place, without serving Ground 1A) removes the void risk entirely for the seller and produces motivated-vendor pricing for the buyer, typically at a 5% to 15% discount to vacant possession value. Landlords who have decided to exit but have not yet triggered the Ground 1A process are the best candidates for this approach. For investors seeking tenanted acquisitions with immediate rental income, this route avoids the Ground 1A complication on both sides of the transaction.
Frequently Asked Questions
What is the Ground 1A 12-month relet ban under the Renters' Rights Act?
Ground 1A is the statutory possession route introduced under the Renters' Rights Act 2025, in force from 1 May 2026. It allows a landlord to recover possession of a tenanted property specifically in order to sell it with vacant possession. The condition attached is that if the sale then fails to complete, for any reason, the landlord is prohibited from re-letting the property for a period of 12 months from the date the original Ground 1A notice was served. The rule was designed to stop landlords using a claimed intention to sell as a cover for tenant eviction followed by immediate re-letting. The consequence is that serving the notice in a slow sales market creates a potentially serious void risk: if the buyer pool is thin and the sale falls through, the property cannot return to the rental market until the 12-month ban expires, regardless of how quickly the landlord tries to re-market it for sale.
How many landlord properties failed to sell in 2025 and what does Ground 1A mean for them?
Hamptons' analysis of 2025 transaction data found that 51% of residential properties listed for sale by landlords nationally failed to complete a sale. For flats specifically, the failure rate was 60%. Had Ground 1A been in force throughout 2025, each of those failed sales would have triggered a 12-month prohibition on re-letting from the date of the original notice. Hamptons estimates between 80,000 and 100,000 properties would have been affected: homes that were unable to sell and simultaneously barred from returning to the rental market, generating no income for their owners for up to a year. Under the rules as they now apply from May 2026, landlords who serve Ground 1A notices on properties that fail to sell face exactly this outcome. The financial cost of a 12-month void on a typical leveraged investment, covering lost rent and continuing mortgage payments, can run to £15,000 to £25,000 depending on the property.
Why is the landlord sell-off most concentrated in London?
In June 2026, previously rented homes made up 20.3% of all properties listed for sale in London, compared with 9.5% in the South East and approximately 9.2% nationally. London landlords face a specific combination of factors that have made holding residential BTL less viable than anywhere else in the UK. Rental yields in London are the lowest of any UK region, typically running at 4.5% to 5.5% gross on current asking prices. Mortgage costs at 75% LTV on a central London flat absorb a high proportion of gross rent even at current rates. Section 24 of the Finance Act 2015 has the most severe impact on higher-rate taxpayers who hold leveraged London property, because the notional income taxed above the basic rate relief is largest where rents are highest but yields are lowest. The additional 5% SDLT surcharge, in force from April 2025, raised the exit calculation further for landlords who bought at high prices and are now considering whether to sell before further capital erosion. London also holds the most flats of any UK region, and the 60% flat sale failure rate makes Ground 1A the riskiest tool to use in this stock type.
What is a tenanted sale and how does it differ from a Ground 1A sale?
A tenanted sale is a property transaction where the seller transfers ownership to the buyer with the existing tenancy in place. The tenant does not vacate. The buyer takes over the landlord's obligations under the existing tenancy agreement on completion. No Ground 1A notice is required because the sale does not depend on achieving vacant possession. The seller avoids the 12-month relet ban entirely, because it only applies when a Ground 1A notice has been served. The buyer receives a property with immediate rental income from day one. The price is typically 5% to 15% lower than the equivalent vacant possession value, reflecting the fact that most retail buyers want vacant possession. In the current market, the tenanted sale is the cleanest exit route for a landlord who wants to leave without taking Ground 1A risk, and the most direct source of motivated-vendor pricing for a professional investor willing to take over an existing tenancy.
Is the landlord sell-off actually over or just slowing down?
It is slowing down, not over. Hamptons' June 2026 data shows the sell-side share of the market fell from 11.3% of all listings one year ago to 9.2%, but 9.2% still represents a significant ongoing flow of landlord stock to the sales market. London's 20.3% figure shows that the exit from high-cost, low-yield markets continues at pace. What has changed is the pace of the national exit, not its direction. The slowdown is driven by the Ground 1A void risk deterring landlords who might otherwise have listed, not by a recovery in BTL confidence or a genuine improvement in the economics of holding residential property. The underlying pressures, Section 24, the EPC C 2030 deadline, the additional SDLT surcharge, and Renters' Rights Act compliance costs, remain in place. Landlords who were planning to exit but have been deterred by Ground 1A have not changed their minds. They have postponed a decision. As the market either improves (making Ground 1A less risky) or conditions worsen further (making the economics of holding more difficult), the sell-off rate will respond accordingly.
