The figure for private landlords deciding to sell their buy-to-let properties has reached a significant high in April, due to the recent tax and legislation changes, according to letting agents.
Such changes to the taxes involved with being a buy-to-let investor are reducing landlords’ margins, leaving many feeling as though they have little alternative but to leave the sector.
As conveyed by the Association of Residential Letting Agents (ARLA) Propertymark in their most recent Private Rented Sector (PRS) report, the number of landlords exiting the market has increased from 4 per branch in March, to 5 per branch in April. This is the highest level seen since records started in 2015.
With a progressive number of landlords leaving the market, the collapse of the supply of rental properties is likely to fall, at this time when demand from prospective renters has increased and more tenants are witnessing a rent climb.
Further revealed in ARLA Propertymark’s results, a gap between supply and demand is reflected. On average, letting agents registered 72 prospective tenants per branch in April, in comparison to 66 in March.
The number of tenants experiencing rent hikes increased to 26% in April. This is the highest level since September 2017, at which point 27% of landlords decided to increase their rents.
David Cox, ARLA Propertymark’s chief executive, has commented: “The barrage of legislative changes landlords have faced over the past few years, combined with political uncertainty has meant the BTL market is becoming increasingly unattractive to investors.
“Landlords are either hiking rents for tenants or choosing to exit the market altogether to avoid facing the increased costs incurred. This in turn is hitting renters most, at a time when a huge number of people rely on the rented sector, and leaves us with the question of where will these people find alternative homes?
“As demand for private rented homes massively continues to outstrip supply, the government can no longer divert its attention from the broken housing market.
“The recent news that the government is regulating the industry is a step in the right direction, but ultimately we just need more homes.”
A recent survey by Rathbone Investment Management also shows a similar result, with data revealing that 38% of participants no longer view property as a strong investment.