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A growing number of buy to let investors are leaving the sector, meaning that property supply for tenants is dwindling slightly.
The latest rental index from Belvoir found that rents were down by 0.5 per cent to £744 a month across England, Scotland and Wales. This was recorded during the first quarter of 2018 in comparison to the same time last year.
Belvoir also found that more landlords are leaving the sector, as an increased number of its offices saw 4-5 landlords selling. 6 per cent of offices saw 11 or more landlords selling, marking the highest percentage for over a year.
The main reasons cited by landlords for selling properties are tax and regulation changes, which have recently placed financial pressure on many landlords, especially small-scale investors. This means that many landlords have been forced to sell up rather than risk making a potential loss on a property due to heavy taxation.
However, the number of offices seeing landlords buy more properties to let remains very similar when compared to Quarter 4 2017.
It was found that from tenants, there was a strong demand for family homes. This was also fueled by a current lack of property supply. Tenants are remaining in their properties for longer, with 33 per cent remaining for 13-18 months. 40 per cent stay for 19-24 months, which is almost double the percentage in the previous quarter. Finally, 17 per cent are choosing to rent a property for over 24 months. One office even reported their average tenants stay in excess of four years.
Belvoir chief executive Dorian Gonsalves spoke out about the recent findings: ‘As more landlords see their profits eroded, and more legislation is in the pipeline, more landlords are likely to exit the market. We are still seeing new investment in the buy to let market, but the number of properties being bought has decreased.’