This is despite rents reaching record levels.
Landlords plan to reduce their portfolios despite rents reaching record levels, Rightmove has found.
Almost a quarter of landlords (24%) said they are planning to sell at least one property from their current portfolio.
One in 10 (11%) landlords said they will be selling all of their rental properties.
Meanwhile asking rents outside London are now at an all-time high of £828 per month.
Miles Shipside, commercial director and housing market analyst at Rightmove, said:“There are a number of forces at play in the current rental market, all leading to record rents for tenants and fewer homes to choose from, yet demand remains strong.
“Worryingly for tenants there are signs that the stock shortage may worsen if some landlords follow through with their plans to sell up, though an increase in plans for build to rent properties may help to fill some of the gap.
“The overall feeling among those landlords who are planning to exit the market is one of frustration with many telling us that the tax changes mean it’s no longer financially attractive to keep their properties.
“Early data seems to point to some of the income lost through the removal of tenant fees being passed on to the tenant in higher rents, but it should still work out cheaper than paying the upfront admin fees as long as stock doesn’t constrict and rents don’t rise too much.
“What we really need now is more properties available to rent. Rising rents may tempt some landlords back in, but momentum is currently to downsize portfolios in spite of the prospect of increasing yields.”
Almost a third of landlords (30%) are planning to increase their portfolio, with the majority of those saying that property still delivers better returns than other investments.
Neil Cobbold, chief operating officer of PayProp, added: “A perfect storm of conditions has pushed asking rents to record highs in many parts of the UK during Q3 2019.
“The tenant fees ban, continued uncertainty surrounding Brexit and rising demand due to lower stock levels have all contributed. In the circumstances, it's reasonable to expect rents to increase further in Q4.
“Continued rental growth is a good news story that letting agents can share with their landlords. Besides being good for the bottom line, it underscores the long-term financial benefits of letting property.
“Moreover, rising demand means agents can promise lower void periods as eager renters snap up properties faster.
“Reacting to the record rental prices recorded in Rightmove's data shows, almost a third (30%) of landlords surveyed are planning to increase their current portfolio – despite recent tax changes making property less attractive as an investment.
“Meanwhile, a quarter (24%) of landlords are looking to sell at least one property, something that could exacerbate the current stock shortage.
“While this could put tenants under further pressure, it benefits landlords as it creates an opportunity for those who want to grow their portfolio by picking up ready-made rental properties in a market where demand continues to outweigh supply.”
