The Ministry of Housing has announced that the total number of private rented homes fell by 46,000 in 2017. About 3,800 homes are sold each month by buy-to-let landlords. By the end of 2017 there were 4.79 million privately rented homes available.

The reason for selling so many homes could be because of tax and regulation changes that have affected landlords. These include a rise in stamp duty and cuts to tax relief on commercial mortgage interest payments. The chief executive of trade body ARLA Propertymark, David Cox said:

“The barrage of legislative changes landlords have faced over the past few years has meant the buy-to-let market is becoming increasingly unattractive to investors. Landlords are either hiking rents for tenants or choosing to exit the market altogether to avoid facing the increased costs incurred.”

Although the trade body, UK Finance showed that there were 19% less buy-to-let mortgages completed in March 2018 compared to the same month in 2017, this does not mean that buy-to-let investment is a bad idea. It could be that many of the homes being sold are weaker performing property.

Some landlords are expanding their portfolios, often purchasing property from another buy-to-let landlord. Many landlords with one or two properties are leaving the market, but larger portfolio landlords with four or more properties are continuing to see good rental yields and capital growth. Some have even formed limited companies to save tax.