Buy-to-let landlords sold 35,000 more properties than they purchased across 2022, according to Hamptons, and that trend looks set to continue with more property investors likely to sell than buy this year.

Increasingly concerned about mounting costs, a growing number of buy-to-let landlords want to reduce the risk by reducing the size of their property portfolio.

Mortgage interest relief changes, the scrapping of the ‘wear and tear’ allowance and the introduction of the 3% stamp duty surcharge have hit landlords’ profits over the past few of years, which partly explains why so many people are exiting the buy-to-let market and thus reducing the supply of much needed private rented stock.

The government’s draconian tax changes have not just pushed a number of BTL landlords out of the PRS, but have also left prospective tenants in some parts of the country with little alternative but to bid against each other, pushing rents up in the process, as a result of falling housing supply.

Daniel Morgan, a buy-to-let investor and co-founder of property data company Propalt, said: “As an investor myself I am having to make difficult choices on rents. Landlords are quite often presented as a problem within the property supply market, but we have been supporting our tenants through these difficult times and for many it’s become unsustainable.

“At the end of 2022 we saw 3% of landlords leave the market completely and 9% of the portfolios we track had less properties than they had at the start of the year.”

According to Propalt, the average rental in the UK is now over £1,400 per calendar month.

Co-founder, Kieran Slinger, commented “We are the only company that tracks events against landlord’s portfolios and that makes the position very clear, landlords and thus suitable rental homes are leaving the market quicker than they are bring replaced. This matches an uplift of properties at auction owned by landlords showing they are trying to exit quickly. When demand is high and supply dwindles, prices will rise.”