Landlord property investment search interest has collapsed across all but one of England's major cities, research reveals.
The findings from online estate agents emoov show that there's been a 41.7% collapse in London’s searches as investors reassess their portfolios.
The firm warns that the waning interest in buying new properties points to a potential landlord exodus from the private rented sector.
Its findings reveal that only Cambridge has reversed the declining trend, recording a 23.5% rise in searches over the past year.
BTL as a long-term investment
Nick Neale, the firm's chief executive, said: "For many years, private landlords were encouraged to see buy to let as a sensible long-term investment.
"It offered rental income, potential capital growth and a form of pension planning for ordinary people who were prepared to take on the responsibility of providing housing."
He added: "The buy to let market isn't disappearing, but it is changing.
"Landlords are having to be more strategic than ever before, whether they're expanding their portfolio, holding onto existing properties or considering a sale.
"The most important thing is to make decisions based on the long-term picture rather than reacting to short-term challenges."
Where landlords interest falls
The research also reveals the locations where landlord demand is dropping at alarming rates.
London lost more than 40,000 searches, sliding from 99,930 to 58,220.
Birmingham fell 33.3%, while Carlisle experienced the biggest drop, plummeting 59.1% to just 1,600 searches in 12 months.
Most cities saw between 5% and 10% recorded falls from potential landlord buyers.
Plymouth witnessed a 2.9% slide, Poole slipped 5.3%, Southampton dropped 5.7%, Derby fell 7.2% and Lichfield slumped by 7.4%.
Landlord age is a factor
However, the agency is highlighting one factor that is driving the shift in falling demand and it's a landlord's age.
The English Private Landlord Survey shows the average landlord is now 59, with nearly two-thirds older than 55.
Retirement planning, tighter regulation and the economics of small-scale lettings are forcing reassessment across the board, it says.
Mr Neale said: "Good tenants deserve safe, secure, well-managed homes. Bad landlords should be dealt with.
"But the current direction of travel has made small-scale private letting increasingly difficult to justify, especially for landlords who own one or two properties and manage them alongside other work or retirement plans."
What landlords must consider
The firm also warns landlords who are considering selling that the move demands careful calculation.
Capital gains tax, legal fees, agent commissions and early mortgage repayment penalties will eat into profits.
A property still generating decent rental yield, that's despite regulation and rising costs, may warrant holding.
Local tenant demand matters too with strong rental metrics and low vacancy rates in some areas offsetting the sector's wider headwinds.
Landlords should consider investment options
The managing director of Accommodation for Students, Simon Thompson, said: "It shouldn't come as a surprise that landlords are hesitant about new properties.
"What with the Renters' Rights Act, political turmoil and new taxes, there are a lot of factors to consider."
He added: "On top of that, the fact is landlords in the PRS are getting older and will be considering their retirement and investment plans.
"For those who don't want the extra responsibilities that come under the Act, they will need to consider the costs of selling carefully.
"For those who remain, and even invest, the sector still offers strong tenant demand and improving remortgaging options to make investment attractive."
