As fed-up landlords brace for further tax rises and soaring mortgage rates, it has been revealed that the number of rental homes being sold is at the highest level in four years.
According to real estate firm Hamptons, 16% or one in six of the homes sold this year have been rental properties.
The data shows that the BTL sell-off was greatest in London with 19% of all home sales being made by landlords.
And when BTL properties come up for sale, it is first-time buyers (FTBs) who are increasingly buying the properties and not other landlords.
FTBs now account for a fifth of buyers
These FTBs now account for a fifth of all home buyers – that’s the highest ratio in five years.
Just one in three properties being sold by a landlord was bought by another landlord, and 47% were sold to other buyers.
Research from analysts TwentyCi also shows landlords who are selling up are not doing to other landlords.
They say that the number of homes to rent has dropped so far that it’s now at the lowest point in five years.
In October, the firm says, 214,938 rental properties were advertised – five years ago there were 339,516 rental homes up for sale.
‘The ‘vilification’ of landlords’
The National Residential Landlords Association’s Chris Norris points to the ‘vilification’ of landlords, ever-changing regulations and rising mortgage rates as being the reasons why landlords are leaving the sector.
Financial analysts at Moneyfacts say an average two-year BTL mortgage rate has risen from 2.9% last December to 6.75% this month.
There’s also the prospect of this month’s Autumn Statement hitting landlords with increased capital gains tax.
Mr Norris told the Daily Telegraph: “The sums just don’t add up on a lot of those properties.
“You’ve either got to put the rent up a lot, which landlords are quite reluctant to do.
“They don’t believe the market will take abnormally large rent increases to cover the mortgage costs.”
Biggest impact would be seen on low-income households
However, with so many landlords leaving the sector, homeless charity Shelter says the impact will be felt most by those on low incomes.
Ruth Jacob, the charity’s policy expert at the charity, urged the Government to act.
She told the Telegraph: “We’re already seeing a severe shortage of affordable homes to rent for people on the lowest incomes and that’s already leaving more and more people at risk of homelessness.”
Landlords who are leaving the sector are also said to be worried about the prospect of section 21 being abolished which would make gaining possession of a rental property more difficult.