Nigel Farage has resigned as leader of UKIP having failed to gain the seat of Thanet South, losing out to Conservative candidate Craig Mackinlay.
But Mr Farage, who lost by almost 3,000 votes, said he would consider leadership again in the future.
Speaking about his defeat he insisted he had "never felt happier", with a "weight lifted off his shoulders".
Former Conservative MP Douglas Carswell was re-elected in Clacton, Essex and the party has won a 13% vote share.
Mr Carswell retained the seat - which UKIP won in a by-election last year - with a reduced majority of 3,437.
Mr Farage and comedian Al Murray both lost out to Conservative Craig McKinley in the Thanet South seat
Mr Farage said he would recommend Suzanne Evans, the deputy chairman, be a stand-in leader until the leadership challenge is complete.
UKIP has increased its share of the poll "massively", winning an estimated 13% of votes, prompting calls from party members for a change to the voting system.
In his acceptance speech, Mr Carswell called the UK system "dysfunctional", saying: "Here in our part of Essex people voted for UKIP and they got UKIP.
"Yet across the country, about five million people will have either voted for UKIP or for the Green Party. Those five million people will be lucky to get a tiny handful of MPs in the House of Commons."
Mark Reckless also lost out on a seat to Tory candidate Kelly Tolhurst in Rochester and Strood by 16,009 votes to 23,142.
He had represented the Kent constituency for the Conservatives from 2010 until switching allegiance to UKIP and beating Ms Tolhurst at last November's by-election.
Mr Reckless told reporters: "I always knew what I was doing was a risk but nobody should under-estimate UKIP's achievement."
UKIP have made significant gains in many seats - boosting its share of the vote.
However, the party failed to win the key target seats of Castle Point, in Essex, as well as Labour-held Great Grimsby. It also came third in Thurrock - another high priority seat.