Fear of property shortage as quarter of landlords plan to sell

One in four landlords is looking to sell property over the coming year, according to a survey by the Residential Landlords Association (RLA).

The RLA surveyed just under 2,500 landlords for the study. Of the respondents, 17% said they will sell one property this year and 8.5% plan to sell two or more.

David Smith, the RLA’s policy director, said: “All the talk of longer tenancies will mean nothing if the homes to rent on not there in the first place.

“The government’s tax increases on the sector are already making it difficult for tenants to find a place to live, with many landlords not renewing tenancies.”

He also claimed that plans to abolish Section 21 eviction notices could lead more landlords to leave the sector.

“If rushed and not thought through, planned changes to the way landlords can repossess properties risk making the situation even worse,” he said.

It is feared that a shrinking rental market could lead to rent rises placing a squeeze on tenants, particularly in London.

Figures from the Department of Housing, Communities and Local Government and the Royal Institution of Chartered Surveyors show a fall in the number of homes to rent at the same time as a rise in demand.

The issue is particularly acute in London, where the number of properties to rent has dropped by a third over the past decade.

Around 17% of the fall has been since 2015, when the new stamp duty surcharge was announced, adding an average of £11,760 to the cost of a second home in the capital.

This, coupled with house price growth and the gradual changes to landlord tax relief, has seen investors moving their portfolios from London and the South East to the North and Midlands.

Read more about this story on the This is Money and Mortgage Strategy websites.