Research carried out by Pegasus Insight found a mood of pessimism among landlords, despite strong fundamentals in the private rented sector (PRS).
More than 90% of landlords said the Labour Government would be negative for their interests, citing worries over tax rises, anti-landlord policies, and loss of control over property management.
Major concerns included changes to Capital Gains Tax (CGT), with 85% highlighting this issue.
Additional worries stemmed from potential rent caps (79%), removal of Section 21 no-fault evictions (73%), mandatory landlord licensing (54%), and new energy performance standards requiring properties to reach Energy Performance Certificate (EPC) Band C (51%).
If significant changes to CGT occur, 39% of landlords said they would stop investing in the sector, increasing to 48% among those with four or more buy-to-let (BTL) properties.
Nearly 20% would exit the market entirely, while 16% would sell some properties and 21% would consider doing so.
In response to potential CGT changes, 26% of landlords said they would raise rents, putting more financial pressure on tenants.
Only 6% of landlords intended to expand their portfolios in 2025, while 41% planned to sell property next year.
Landlords with buy-to-let (BTL) mortgages were more inclined to sell, with 46% indicating this intention compared with 34% of outright owners.
Among landlords with 20 or more units, 59% planned to sell some properties due to concerns over future rental reforms and a generally lack of confidence in the PRS.
Despite this pessimism, 79% of landlords reported strong tenant demand, with average rental yields reaching a 10-year high of 6.5%.
According to the research, 70% of landlords were making a small profit, while 17% report a large profit.
Mark Long, founder and director of Pegasus Insight, said: “This research reveals the depth of concern over the attitude and potential actions of the new government when it comes to the treatment of landlords.
“This concern is all the more striking given the strong evidence that the sector is in fact thriving, despite the challenging environment it has recently weathered.
“The Chancellor would be wise to heed the warning that imposing a heavier CGT burden on landlords could result in a quarter of them increasing rents immediately and a sizeable reduction in the number of properties in the PRS in the near term, leading to yet more rent rises as the supply/demand imbalance worsens over the longer term.
“The PRS is vital to the housing needs of the nation, and it is crucial that this government offers reassurance and support to the landlords who provide homes for almost 20% of our population.
“Let’s hope this week’s Budget provides landlords with more reasons to be cheerful and confident in the government’s approach for our Q4 report on Landlord Trends.”
