A generation of landlords with buy-to-let mortgages are retiring and selling, leaving fewer properties to rent, a real estate agency said.
Hamptons Estate Agents estimates that around 140,000 people who bought homes to rent in the 1990s have sold them in the past year to fund their retirement.
The agency warned that numbers were likely to keep rising and new landlords would not fill the void left.
Younger people do not have the money to invest in rental properties, it said.
Hamptons said his research was based on his network of agents and data from the Office for National Statistics. It added that it reflects the entire rental market, which currently has a pool of 2.75 million landlords.
Age is the main reason for the exodus, but sub-par returns, the general economy, tax and regulatory changes are also to blame, it said.
Researcher Aneisha Beveridge said this “combination of everything” means older landlords just have had enough.
While rents for new tenants were relatively high, “a fairly high proportion” of older landlords had long-term tenants who were earning relatively low returns, Ms Beveridge said.
“But some don’t sell all of their properties, they just sell one or two so they can afford a cruise or time on the golf course or help their families,” she added.
The research found that around 96,000 landlords will turn 65 in the UK each coming year.
This is in addition to the 924,000 who are already over 65 and that the number of landlords retiring annually doubled between 2010 and 2022.
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The agency noted that London was hardest hit, as many of the first buy-to-let mortgages were used on new, low-rise flats in the city center – the highest proportion of properties sold by long-term landlords.
Hamptons also noted that the exiting landlords left a void in the industry that wasn’t filled by a new generation of investors.
“The numbers don’t stack up,” Ms Beveridge said. “Look at how the demographics have changed for younger people who are struggling to afford a home of their own, let alone buying it to rent.”
The agency said while house price growth continued to slow, rents were still rising sharply.
Although there was slightly more choice of rental properties this year compared to 2022, the number of rental apartments on the market as a whole appeared to have found a “new normal” at almost two-thirds below pre-pandemic levels.
Campaign group Generation Rent, which is working to raise awareness of renters’ issues, said “we shouldn’t be surprised” at the trend of aging landlords selling.
Spokesman Dan Wilson Craw said: “For the past three decades, the government has relied on amateurs saving for retirement to provide for a large proportion of the country’s homes.
“The real problem is the chronic failure to build enough houses where people want to live.”
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