9^th Sep 2018

A recent report released by the Ministry of Housing shows that private landlords are selling around 4,000 BTL properties every month, resulting in the first ever recorded decline in rental properties since 1988.

The report shows that throughout 2017 the number of rented residences dropped by 46,000 down to 4.79 million, the largest reduction in eighteen years.

UK Finance's latest figures show that in March there was only 5,500 new BTL mortgage applications completed which is virtually a fifth lower (19%) than last years' corresponding month.

The decline in numbers of buy-to-let properties unsurprisingly coincides with the introduction of the 3% stamp duty and the phasing down of the mortgage interest tax relief.

A property investment crowdfunding company sends out a stark warning that the "exodus of landlords" is going to have a severe impact on the worsening housing shortage, especially in some areas of London.

Over the last twelve months London has undergone a 20% reduction in rentable homes, and throughout the rest of the country there has been a fall of 12% in private rental properties.

Jatin Ondhia, CEO of a property investment crowdfunding company, said: “As a result of the Government’s increase in stamp duty, it is now much more costly to acquire a buy-to-let property. A £250,000 investment property will incur stamp duty of £10,000 compared to £2,500 for an owner occupier.

“Many landlords have seen their profits eroded by the increased burden of taxation and regulation. They are also facing poor buy-to-let yields especially in London for example, where they are between just 2-3%, while nationwide the average yields are between 6-8%.

“Over the last six months, we have seen a sharp increase in investors diversifying into property crowdfunding, having previously invested in the buy-to-let market. Since the launch of our crowdfunding platform, we have seen many landlords investing in our residential development projects, from as little as £5,000."

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