There has been a significant increase in the number of landlords exiting the buy-to-let sector due to higher stamp duty costs and the phasing out of mortgage tax relief, a new study shows.
Estate agents reported an average of four landlords selling properties per branch last month, up from three in February, according to the research from the Association of Residential Letting Agents (ARLA Propertymark).
The last time the volume increased above three per branch was in November last year, when a ban on letting agent fees was announced by the Chancellor Philip Hammond during his Autumn Statement.
With landlords quitting the market, there will seemingly be fewer rental properties available to let, and yet the number of registered tenants per branch increased, albeit marginally, from 34 in February to 36 last month.
However, the research, based on an online survey of 331 member branches between 3 and 10 April 2017, carried out by Opinium Research, found that the number of agents witnessing rent reductions increased from 2.2% to 3.6%, with a quarter seeing landlords increase rents – down 7% year-on-year.
Somewhat worryingly, two-thirds (66%) of ARLA Propertymark members fear further landlord taxes will be introduced this year, which will only “further dampen supply”, according to David Cox, ARLA Propertymark’s chief executive.
“The introduction of mortgage interest relief means the market is becoming less and less attractive to investors and it appears some landlords are, as we predicted, choosing to exit the market rather than pay the higher taxes,” he said.