One leading firm of letting agents is warning that buy to let investors are beginning to exit the sector.
The warning comes from Belvoir who say that while the numbers of landlords leaving is not huge, there is a trend appearing.
The firm's chief executive Dorian Gonsalves said: “We are not currently seeing a big exit of landlords but they are beginning to sell up their properties.
“Nearly 37% of our agents believe the government is underestimating how many of these landlords will be affected by changes to mortgage interest relief.”
He added: “Belvoir agents expect enquiries from investors to remain the same, particularly for room rates. The average void period for one week remains the same but there is an increase for two-week voids.”
Tenants are now remaining in their property
In their latest report, the firm also reveals that most tenants are now remaining in their property for longer.
While nearly half will stay for between 13 and 18 months, more than 36% will stay for up to two years.
Their data also reveals that average rents for the second quarter of 2017 have seen an annual increase of 2.75% to reach an average of £751 per month.
However, this figure disguises regional differences which range from £597 in the north west of England, £1,048 in the south east and an average of £1,446 in London.
London rents rise after falls
Meanwhile, figures from Countrywide revealed that rents in London have risen in July after eight months of falls.
The estate agency says this is because there are fewer landlords buying investment properties.
They say that the average rent in London for July increased by 2.1% compared to July last year.
Investors have been deterred
Also, the change to mortgage interest relief and the new stamp duty rates have also led to investors being deterred from the buy to let market.
Indeed, they say that the proportion of homes being bought by landlords has fallen to its lowest for seven years.
The research director at Countrywide, Johnny Morris, said: “The stock of homes for renting is now falling in expensive parts of the country because the higher tax rates have dissuaded landlords from buying which, ultimately, means fewer homes will come onto the market and the rents will be higher.”
Their data also points to the higher rates of stamp duty being less of a deterrent for property investors in the north of England and the Midlands.
