The number of landlords selling properties has increased in the face of rising interest rates and uncertainty over house prices, figures showed today.
The Royal Institution of Chartered Surveyors (RICS) said 10 per cent of investment landlords had put their properties on the market when tenancy agreements had come up for renewal during the three months to the end of July, up from 7.5 per cent in October.
This was despite rents in England, Wales and Scotland rising at their fastest pace for three years and demand from tenants remaining firm.
The group said many would-be buyers were taking up rented accommodation while they waited to see what happened to house prices, or because they had been priced out of the property market.
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It said this contributed to rents rising at their fastest pace since October 2001, with 13 per cent more surveyors reporting a rise in rents than those that reported a fall, and the same proportion expect further increases going forward.
Rents now average £727 a month across Britain, ranging from £367 a month in Wales to £1,622 in London.
During the three months demand for rented property continued to rise, although it did so at its slowest pace for 18 months.
RICS said the slowdown was most visible in London, with demand remaining healthy outside the capital, particularly in northern regions where house prices are still rising.
RICS residential lettings spokesman Jeremy Leaf said: “Demand for rented property continues to increase, to some extent boosted by potential first-time buyers who are either being priced out of the market, or waiting to see if house prices are really flattening out.
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“Investors have become more cautious, wary of a possible peak in house values. As a result, the proportion of existing landlords selling their property when tenancies come up for renewal has risen.
“However, this is having little impact on the wider housing market.”
The group said private renting was greatest in the south east of England, university and seaside towns and some large cities.
It added that the majority of tenants in the UK were young adults, with nearly two-thirds of people who rented aged under 35 and a quarter under 25.
Around a third of privately rented properties are flats, with the remaining two-thirds made up mainly of terraced and semi-detached houses.
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Meanwhile buy-to-let broker Landlord Mortgages said investment landlords in Scotland were getting the best returns on their properties, receiving an average of 8.02 per cent of the property’s value in rent each year, compared with 5.99 per cent in England and 6.19 per cent in Northern Ireland.