A significant number of landlords planning to exit the market within the next two years attribute their decision primarily to tax burdens and bureaucratic hurdles, according to The Deposit Protection Service’s latest survey.

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The DPS surveyed over 1,200 landlords about their perspectives on the private rental sector (PRS) and their future plans for their properties, compiling the results in their publication, "The Private Rented Sector Review."

The report revealed that 47% of respondents were contemplating selling part or all of their property portfolio which is has dropped from 49% in May.

The majority of landlords -  89% - are seriously considering selling properties and attributed their decision to the recent or upcoming changes in legislation and regulation as a primary factor in their decision to sell which has increased by 4% from 85% in May.

When questioned about the specific legislative or regulatory changes influencing their decision to sell, landlords provided detailed insights:

- 94% of respondents indicated that the proposed reforms to Section 21 evictions influencing their decision, up 5% from 89% in May 2024:

- 91% reported that the Renters Rights’ Bill, formerly known as the Renters’ (Reform) Bill, played a role in their decision to sell; this marks a 6% rise from 85% in May 2024 and a 10% increase from 81% in August 2023;

- Similarly, 91% cited changes to capital gains tax as being a factor, an 8% rise from 83% in May.

A spokesperson for The DPS says: “The proportion of landlords planning to exit the PRS altogether has remained largely static over the last few years, and the well-publicised shortage of rental properties continues. 

“Our report shows that the legislative and taxation landscapes are becoming greater influences on landlords’ thinking, with just under 90% citing laws or tax as a key reason for their intended departure.

“Rising materials costs — which have a direct impact on property maintenance prices — and the cost of buy-to-let mortgages are also affecting respondents’ plans.”

From June onwards the percentage of landlords planning to sell rental properties due to concerns about reduced post-tax returns has risen by 4% from 72% to 76%.

And 30% of landlords who said they intend to sell up reported that concerns about declining property values had influenced their decision: which has risen by 9% since May’s 21%, but lower than the 40% who expressed the same concern in August 2023. 

The organisation’s research found that just under a quarter (24%) of respondents plan to sell all their properties during the next two years, up 4% since May this year (20%) and 2% since August 2023 (22%).

The study also revealed that 23% of respondents intended to sell only a portion of their properties which dropped from 29% in May 2024.

Nearly two-thirds (61%) of respondents had initially bought their properties exclusively for rental purposes, while 30% had either acquired their properties through inheritance or originally bought them as their primary residences.