Landlord exits from the private rental; sector remain most concentrated in London and the South of England, according to data released today. 

Higher property prices, lower yields and higher mortgage costs have put the greatest pressure on investor returns in these markets according to lettings agency Hamptons.

In London, one in five homes listed for sale in June had previously been let within the last five years, at 20.3%.  

This was more than double the share recorded in the South East, where 9.5% of homes listed for sale had previously been rented.

The biggest year-on-year falls in landlord sales have been in Northern markets, where stronger yields mean buy-to-let returns remain more resilient.  

In these regions, landlords are less exposed to the profit pressures weighing on higher-value Southern markets, making them more likely to hold onto rental stock.

Commenting, Aneisha Beveridge – head of research at Hamptons – comments: “The Renters Rights Act has been a long time coming, and most landlords who wanted to leave the sector because of it have probably already done so.  

“While the new rules may have encouraged some landlords to sell, the bigger shift has come from years of tax changes and higher mortgage costs, which have gradually reduced the number of landlords in the market.

“What’s changed more recently is the balance of risk.  A tougher sales market and the introduction of a 12-month re-letting ban mean selling has become a more complicated proposition for landlords.  

“For many, the prospect of being left with an empty property that can’t easily return to the rental market has made holding on to an investment look more attractive.

“For those landlords who have chosen to sit tight, there are signs that their decision may start to pay off.  

Yields have improved over the last couple of years as rents have risen faster than house prices, giving investors more headroom to absorb higher borrowing costs.  

“At the same time, rental growth is picking up again, with rents on newly let homes rising at their fastest pace in more than a year.  

“While challenges undoubtedly remain, conditions for landlords arguably look better than they did 12 months ago.”