One in five members of the National Landlords Association (NLA) said they intend to reduce the number of properties in their portfolio over the next year – the highest level of intended property sales in 10 years.

The NLA believes this is due to recent tax changes which, along with a raft of other measures, such as the Stamp Duty surcharge, have been designed to curb buy-to-let activity. But critics suggest the Government has gone too far.

Richard Lambert, CEO of the NLA, said: “More and more people are relying on this sector for a home, so it is vital that landlords not only provide a high standard of accommodation, but are incentivised to do so by the prospects of a reasonable return on investment.

“It is our view that these policies are undermining the viability of many landlords’ businesses and removing the incentives to invest in residential property for business purposes.”

Priced out

Some landlords also admitted they planned to increase rents to offset their own extra costs. Challenger bank Aldermore warned that pricing out renters in this way could be a disaster for the UK housing market.

Charles McDowell, Aldermore’s commercial director, mortgages, said: “In many ways, this was expected. On the back of the various changes to the market, including the increase of Stamp Duty and reduction of tax relief, many commentators predicted that the buy-to-let mortgage market would contract by 20%. Therefore, to see this number of landlords intending to sell is in line with expectations.

“From our perspective however, the most worrying comment in the report is that most landlords will increase rents before they sell, to cover the increase in costs, due to these changes. This would be a disaster for tenants, especially those who are renting and have aspirations to buy their own home, as ultimately it will affect their ability to save a deposit and get on the ladder.”