The number of landlords heading for the exit has hit a 12-month high.
Belvoir’s first quarter rental index, based on feedback from its franchisees, found that 5.6% of offices saw 11 or more landlords selling up – the highest percentage for over a year.
Almost a third, 31.5% of franchisees, also said they had seen four to five landlords deciding to quit, while 46.3% had seen up to three landlords selling up.
The main reasons given for selling properties were tax and regulatory changes.
The Belvoir index also showed a supply issue as these high numbers of landlords exits are not being replaced by a similar figure for new properties being added to portfolios.
Fewer offices saw landlords add significant numbers of properties in the first quarter, with just 3.7% seeing six to ten add to their portfolios and 1.9% saying 11 or more landlords had made additions. This was down from 9.6% and 5.8% respectively at the end of 2017.
There was some good news for landlords, with tenants continuing to stay in their properties for longer, with 33% preferring a tenancy of 13-18 months and 40% staying for 19-24 months – almost double the previous quarter and the highest percentage for the past two years.
Overall, average rents in the first quarter were flat on an annual basis at £784 per month.
Dorian Gonsalves, chief executive of Belvoir, said: “The trends that Belvoir is reporting are very much in line with our predictions at the beginning of this year.
“As 2018 progresses, there is no doubt that landlords and tenants will find themselves shouldered with an extra burden of cost due to continued government interference in the rental market, which includes the implementation of punitive tax changes.
“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.”