Private rental sector to shrink as buy to let landlords leave market

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The UK private rented sector is set to contract in coming years, as buy to let landlords opt out of the market.

Management firm Skandia UK predicts that an exodus of buy to let investors is due and that this could see them sell off two thirds of their rental property.

This is set to be driven by falling house prices and higher mortgage costs, which are making property investment less viable for buy to let landlords, the company forecasts.

Commenting on the trend, Nick Poyntz-Wright, head of the firm's UK division, said: "Higher mortgage rates and falling property prices will cause investors to reconsider their exposure to residential property and many will choose a more diversified approach."

Data from the Council of Mortgage Lenders shows that over the last decade the UK stock of buy to let mortgages was £2 billion, with these products accounting for under one in 100of all UK home loans.

However, the boom in interest in buy to let saw this rise to such an extent that they now represent one in ten.

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