A leading letting agency in London has claimed that the Government’s Renters (Reform) Bill going through parliament, along with promises by Labour to go even further than the Tories if they gain power, are eroding landlord confidence in the private rented sector.

Knight Frank says this, along with other factors, are prompting more landlords to sell up.

These other factors have included the removal of tax relief on mortgage interest, the increasing use of property licencing by local councils and the introduction of an additional 3% stamp duty levy when properties are purchased. And earlier this year HM Treasury said it wanted to see more private landlords quit the sector.

Knight Frank’s latest lettings report says: “Several months ahead of a general election, there are early signs that more landlords are considering a sale.

“The number of new lettings instructions across London was 4% lower in April compared to the same month last year. Meanwhile, sales instructions were up by 16% over the same period.”

Reduction

But a reduction in supply, while bad for tenants as rents continue to climb in London, is good for landlords, the firm says.

“As rents continue to increase and sales values decline, gross average yields have risen.

“A figure of 4.24% in prime central London in April was the highest it has been since March 2007.”

Knight Frank also says that among landlords who do decide to stay in the market, many are looking to the short-lets market and platforms such as Airbnb so that they are free to sell when they are ready, rather than having to wait for longer-term tenancies to end or tenants to move out.