The proportion of former rental properties moving into the sales market is at its highest level on record, according to Rightmove.

It said 18% of properties that are currently for sale were previously on the rental market.

It compares to a significantly lower figure of 8% in 2010.

The hotspot is London, where 29% of homes for sale were previously for rent, followed by Scotland at 19% and the North East at 19%.

 

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Autumn Budget

The trend has been identified ahead of the Autumn Statement on 30 October.

The Chancellor Rachel Reeves is widely expected to make changes to CGT.

The change could see landlords face a higher tax bill when they sell their investments.

 

Landlords being ‘squeezed’

Property experts suggested that landlords were at risk of continuing to be “squeezed” out of the sector.

Angharad Trueman, president of ARLA Propertymark, said: “The private rented sector plays a crucial role in providing safe and secure housing across the UK.

“However, current government policy continues to risk squeezing good landlords out of the sector with ever-increasing demands from new and amended legislation, taxes and other financial hurdles, ultimately making finding and affording a home increasingly difficult.

“With the social rented sector at full capacity and the prospect of buying a home out of reach for many, the private rented sector needs to be better sustained and nurtured.

“The UK government must support investment to make this an attractive option for prospective and current landlords to kick-start the nation’s housing crisis recovery and provide people with much-needed homes.”

 

No sudden shift

However, Rightmove insisted that the increase of homes moving out of the rental sector between 2010 and 2024 is not a sudden shift in landlord behaviour.

It said the figures suggested this “isn’t a sudden mass exodus of landlords”.

This is because the previous five-year average for homes moving from the rental sector to the sales market is 14%.

It also said there is “still no glut of properties for sale”.

The number of new properties coming to the market for sale is now 14% ahead of last year.

It follows a cut in interest rates by the Bank of England for the first time in four years – something that has helped to lower mortgage payments for many borrowers.

Last year was a quieter period for sales as homemovers were hit by high inflation and peak mortgage rates.

 

Call for landlord incentives

Rightmove did, however, admit that there need to be incentives for landlords to stay in the market and to continue investing in a healthy rental sector – something that will benefit tenants.

Tim Bannister, Rightmove’s property expert, said: “In recent years, it has become more attractive for some landlords to leave the rental sector rather than to continue to invest in it, due to rising costs, taxes, and legislation.

“A healthy private rented sector needs landlord investment to provide tenants with a good choice of homes.

“We’ve seen over the last few years how the supply and demand imbalance can contribute to rising rents, so there is a worry that without encouragement for landlords to stay in rather than leave the rental sector, it is tenants who will pay the price.”

He continued: “However, despite the trend of more landlords choosing to sell up, it doesn’t appear to be a mass exodus, and we will need to monitor the longer-term impacts of what happens to the rental supply that is put up for sale.

“For example, these homes could provide first-time buyers with more choice.

“They might also be purchased by other landlords and put back into the rental market, which would signal a changing of the guard rather than a complete exit from landlords.

“In any case, we hope the government is considering ways it can support landlords and the private rented sector ahead of the Autumn Statement.”

Marc von Grundherr, director of Benham and Reeves in London, said: “The potential equalising of capital gains tax is, of course, a concern for many landlords.

“If the Labour government was to follow through with it, it could make for a significant increase in the tax paid by the average landlord when the time did come for them to exit the sector.

“This would be yet another blow to those who provide vital housing stock that is sorely needed within the rental sector, following a string of legislative changes already introduced in recent years to dent profitability.

“Despite this, we’re simply not seeing the exodus of landlords that is so often reported, as despite such changes, buy-to-let remains a strong investment.

“It’s certainly one that most take with a very long-term view and they expect ups and downs, but generally speaking, the returns are consistently good.”