ARLA warns: Tax changes are forcing landlords to quit

Letting agents have reporting an average of four landlords per branch selling up and quitting the buy to let sector in the past month.

The Association of Residential Letting Agents' latest report says this is up from the three-per-branch average recording a month ago. The last time landlords quitting the sector exceeded an average of three per agency branch was in November last year, when the ban on letting agents' fees on tenants in England was announced.

At the same time ARLA says the number of tenants seeking to negotiate rent reductions is growing.

In February some 2.2 per cent of agents saw successful rent reductions; in March this had risen to 3.6 per cent.

On the other hand no fewer than 25 per cent of agents reported their landlord clients increasing rents. This time last year some 32 per cent of landlords increased rents.

In March ARLA member agents had an average of 36 prospective tenants registering per branch - an increase over February's 34.

"It's concerning that, despite supply increasing over last year, stock failed to return to the market after dipping in February. When we also consider this is coupled with a rise in the number of landlords selling properties, this is bad news for those searching for a rental property" says ARLA Propertymark's chief executive, David Cox.

"The market is becoming less and less attractive to investors and it appears that some landlords are, as we predicted, choosing to exit the market rather than pay higher taxes. What's more 66 per cent of our members are concerned the government will introduce even more landlord taxes in 2017" he continues.