"As a result of the Government’s increase in stamp duty, it is now much more costly to acquire a buy-to-let property."
The latest Ministry of Housing report shows that almost 4,000 buy-to-let properties are being sold by landlords each month, resulting in the first recorded decline in the number of rental properties in 18 years.
The figures show the number of privately rented homes in England fell by 46,000 to 4.79 million last year, the largest reduction since 1988. Recent figures from UK Finance also reveal that there were just 5,500 new buy-to-let home mortgage purchases completed in March, some 19% fewer than in the same month last year.
These figures come two years after the introduction of new tax measures, including the 3% extra stamp duty introduced on homes bought to let and the limiting of mortgage interest tax relief.
Shojin Property Partners warns that the "exodus of landlords" is causing an acute shortage of available properties to rent, particularly in parts of London.
The capital has seen a 20% drop in the number of properties available to rent over the last 12 months. Over the same period, there has been a 12% fall in the number of available rental properties across the country.
Jatin Ondhia, CEO of Shojin Property Partners, commented: “As a result of the Government’s increase in stamp duty, it is now much more costly to acquire a buy-to-let property. A £250,000 investment property will incur stamp duty of £10,000 compared to £2,500 for an owner occupier.
“Many landlords have seen their profits eroded by the increased burden of taxation and regulation. They are also facing poor buy-to-let yields especially in London for example, where they are between just 2-3%, while nationwide the average yields are between 6-8%.
“Over the last six months, we have seen a sharp increase in investors diversifying into property crowdfunding, having previously invested in the buy-to-let market. Since the launch of our crowdfunding platform, we have seen many landlords investing in our residential development projects, from as little as £5,000."