The total value of all the rental homes in the UK has reached a record high, despite concerns new regulation will deter buy-to-let investors.
Rental property in the UK is now worth £1.4 trillion, up 6.4 per cent or £82.6bn since last year, according to the Buy to Let Britain report by lender Kent Reliance.
Meanwhile, average rents are rising more slowly. Tenants in the UK are now paying an average of £895 per month, up 1.5 per cent from last year, compared with a 2.4 per cent rise in 2016.
Although in recent years landlords have been hit by an increase in stamp duty, a cut to relief on mortgage interest payments and have been forced to shoulder estate agents' fees when signing up new tenants, they remained tentatively confident: the report suggested 41 per cent are optimistic about prospects for their portfolios.
However, just five per cent said demand from tenants had risen.
“Landlords are swallowing the unpleasant cocktail of higher taxation and tighter regulation, and this is undermining the expansion of the private rented sector," said Andy Golding, chief executive of OneSavings Bank, the parent company of Kent Reliance.
"A fundamental shift in the landlord population is now underway, as buy to let moves from being a popular past-time for hundreds of thousands of British amateur landlords, to the preserve of committed long-term investors with experience and expertise."