New rules and higher taxes have pushed a number of landlords out of the buy-to-let (BTL) sector, according to research from Together.
Research revealed that 12% of BTL landlords planned to sell properties this year, with 11% planning to leave the market entirely.
Another 8% said they did not see opportunities in the next 12 months and would pause investment.
Despite this, the 2024 BTL market remained active, with UK Finance data showing the number of BTL mortgages in Q4 rose by 39% year-on-year, and total lending value went up 47%.
When asked why they were leaving, 14% of soon-to-be ex-landlords pointed to capital gains tax (CGT), 12% said rising interest rates, and 8% blamed the Renters Reform Bill.
The research also found 29% of landlords were planning to expand or diversify their portfolio, showing market activity was mainly led by bigger landlords who could handle higher costs and new rules.
Landlords still in the market faced other challenges, as 17% pointed to higher building material costs, while 16% named overseas investors and further policy changes under Labour as concerns.
15% cited Stamp Duty increases and another 15% mentioned higher safety standards as challenges.
Ryan Etchells, CCO at Together, said: “BTL is a robust market and while the impact of cost pressures and wider regulatory changes is apparent, we are still seeing a healthy proportion of landlords riding out the wave and expanding their portfolios.
“There will likely be some smaller or amateur landlords who decide to sell off investments or exit completely, but in their position we are already seeing larger, professional landlords stepping in to seize diversified opportunities.
“Until the final outcome of the Renters Reform Bill is known, there may be a bit more volatility as landlords assess the cost impact to them and their property plans this year.
“But, on the whole it’s a changing of the guard rather than a mass exodus.”
Etchells added: “A combination of more flexible BTL regulations and an agile lending sector can help landlords to manage their portfolios and ensure they are able to leverage all available opportunities – something the specialist sector is in a prime position to do.”
