A fall in the supply of available rental properties suggests some landlords may be quitting the buy to let sector as a result of increased taxes and regulations, a survey suggests.

The website Home, in its monthly market snapshot of both sales and lettings, says at the moment it has picked up only “a trickle” of landlords selling up – but it warns that there is a “clear and present danger that this could become a flood.

It says that at this stage the increased supply this would put on the sales market is likely to be seen only in localised low-yielding areas where – thanks to higher taxes – renting out has become loss-making. 

“Such areas will be restricted to marginal (overbought) areas where yields can be as low as one per cent or two per cent and/or rents are in decline and voids are rising” says the website.

It then goes on to say that the converse will be true of the UK’s most dynamic regional lettings markets. 

“Substantial rent rises (over and above the rate of inflation) are evident in both the East and West Midlands and the North West (up 9.6 per cent, 4.9 per cent and 5.5 per cent respectively year-on-year)” it adds.