More than 222,500 landlords have been lost to the private rented sector in the last three years alone. That is the staggering news reported by the Daily Mail newspaper on the 25th of February.
The drastic slump is evidence of the steady loss in confidence among landlords of their ability to achieve a profitable yield on their let properties. Nevertheless, the recent election results – granting a hefty majority to the government – gives landlords encouragement that both rents and property prices will rise during the present administration.
The exodus – in which 8% of buy to let landlords have now left the sector – began in 2017. That was the year the then Chancellor George Osborne introduced changes to the tax regime removing landlords’ ability to claim income tax relief on mortgage interest repayments.
Since then, every year seems to have seen the implementation of more legislation, rules and regulations restricting how landlords conduct their business. Thousands of them now have to pay more income tax, pay a stamp duty surcharge on any additional property they buy, and need to meet higher mortgage lending thresholds.
A glimmer of light comes from an apparent paradox. Although the number of landlords has fallen, the number of properties available for rent has remained more or less the same. Indeed, the last 12 months have seen a slight increase.
This has been brought about by landlords with already large portfolios of buy to let property snapping up additional homes which come onto the market. Those who have been leaving the sector in droves tend to be the smaller – and in many cases “accidental” landlords.