Forty-eight per cent of landlords are considering divesting from the rental sector due to an increase in regulation and rules, new research by Aldermore Bank revealed.

Aldermore’s latest buy-to-let (BTL) research, which surveyed 1,000 UK-based landlords in the final quarter of 2019, revealed that recent rule and regulation changes had made 59% suggest it is much harder being a landlord now than five years ago.

The retail bank said the regulation changes include the introduction of a 3% stamp duty on rental and second properties, changes to taxation and more complex mortgage applications.

The research also indicated that 68% of respondents felt recent changes had been “too broad” and needed to focus more on punishing the rogue landlords – with 28% of surveyed landlords suggesting that regulatory change was the biggest threat to their investment, while others cited tax changes (33%) and high maintenance costs (28%) as barriers.

Another 59% of landlords also believe that the ban on lettings fees may result in landlords raising their rents due to the increased costs put upon them, the research indicated.

Aldermore director of mortgages, Damian Thompson, said: “Private landlords exiting the UK market would mean less choice and likely impact negatively the quality of rental properties for tenants. The number of people renting in the UK has been rapidly growing, up 1.7 million in ten years, so it is vital there is enough rental supply to meet this demand.

“Landlords may have been impacted by increased costs and more complex processes in the past five years, but the rental market continues to be a strong long-term investment.”

Aldermore’s research also stated the impact of divesting would be “wide-ranging” – with 53% of landlords believing that private landlords exiting the market would hurt the quality of properties available to tenants.

Despite the pressures that landlords are currently feeling, according to the retail bank, its research revealed that 52% would still recommend becoming a landlord as an investment opportunity.

Thompson added: “Landlords will need support and advice on how to manage their portfolios going forward from lenders and the wider industry so they can continue to support the private rented sector the way it needs to be.”

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