Some 15 per cent of landlords are considering selling up due to rising costs associated with their property, data from Cornerstone Tax has revealed.
Cornerstone Group International chairman, David Hannah, said the data highlights a “clear issue” in the UK’s rental market,
“Many of these landlords took out mortgages on buy-to-let schemes during a period of sustained low interest rates; fast forward to 2023 and the pressure facing landlords is simply too much,” he explained.
“Spiralling interest rates and the highest tax burden since the second world war have forced thousands of landlords to sell up, which then puts further pressure on renters due to a lack of stock."
The data follows a report from The Hamptons Monthly Letting Index which found that UK landlords are collectively paying £15bn in mortgage interest annually - up by £4.3bn over the last 12 months, equaling a 40 per cent increase.
According to Cornerstone's data, 20 per cent of landlords became one without the sufficient knowledge needed and have lost thousands as a result, with average estimates as high as £7,500 in 2023 alone.
The research also examined the impact on renters, reporting that 19 per cent of tenants have had to change rental properties five times in less than five years through no fault of their own.
This was due to landlords being forced to either exit the market or pass on these record high mortgage costs onto their tenants.
Moreover, as demand continues to outstrip supply within the market, 17 per cent of tenants admitted that they have lost out on a property that they wanted to rent in the past two years due to a bidding war.
Positivity for renters
However, there may be hope for renters as this year has seen some of the sharpest falls in house prices in over 14 years, while the Bank of England's decision to pause interest hikes has allowed the mortgage market to stabilise.
A majority of the UK’s largest mortgage lenders have also started slashing their rates for first time buyers, with Halifax offering five-year fixed rate mortgages at less than 5 per cent.
These figures should therefore provide some comfort for those looking to escape an overheated rental market besot by the exit of a record number of landlords.
tom.dunstan@ft.com
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