Homeowners are buying the vast majority of rental properties being offloaded by landlords, reducing local rented supply.
A survey of more than 500 big valuers and surveyors reveals that 90% reported that these properties were typically being sold to buyers who planned to make them their primary residence.
e.surv’s research also shows 79% of surveyors witnessed a drop in landlords planning to buy new investment properties during the last 12 months, while half saw a rise in landlords planning to rationalise their portfolio or exit entirely.
Half of the surveyors also saw an increase in the number of privately rented homes entering the sales market as pressure on landlords mounts.
The demand for rental homes continues to outstrip supply across the UK, with 44% of respondents reporting falls in the stock of rental instructions coming to market.
The survey also finds that properties are being let more quickly and typically at or above the asking price in the most active rental markets; 45% of London-based surveyors reported an increase in rental prices let above the asking price, with 40% seeing the time to let a property shorten.
While the number of private landlords exiting the market has not been at the scale some first feared, Rob Owens, head of research at e.surv, says that its analysis shows there is likely to be continued pressure on supply and prices as landlords consider their position.
“The buy-to-let market is facing a number of challenges at present, with rising mortgage rates the biggest concern for landlords,” he adds. “It is important that the government takes steps to support the buy-to-let market and ensure that it remains a viable investment option for landlords.”