Tough action by the government to tighten up the buy to let sector is driving rising numbers of landlords to leave the market, claim letting agents.
Landlords are facing unprecedented waves of tax changes and housing regulations that are biting into profits and leading to many selling up, while new investors are put off entering the market, says ARLA Propertymark.
The trade body for letting agents issued the warning as part of a review of the year.
“The number of landlords exiting the rental market is rising, and those who aren’t worried about it yet, should be,” said David Cox, ARLA’s chief executive.
“Buy-to-let investors have faced a huge amount of legislative change over the last 18 months alone, and as costs rise, they are being driven out of the market and new ones are being deterred from entering.
“The Government is developing a joined-up approach for legislating the private rented sector, but until this has been put into action and the market is made more attractive for landlords, rents will continue to rise, competition will intensify, and tenants will continue to suffer.”
His conclusions are based on data collected by ARLA from letting agents, which revealed that the number of landlords selling up has increased from an average of three a letting branch to four over the past 12 months. Meanwhile, more tenants are looking to rent, rising from an average of 68 on letting agent lists to 79 a branch.
At the same time, rents have gone up for 28 per cent of tenants, compared with 25 per cent of tenants last year, while the number of properties available to let has dipped from 189 to 187 a branch over the past 12 months.
Landlords have seen successive hikes in income tax, capital gains tax and stamp duty, with many changes programmed for next year.