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Landlords' exodus threatens rental market stability amid Labour's tax changes
A recent survey by Propertymark, representing nearly 20,000 estate agents in the UK, reveals that 57% of landlords are considering exiting the private rented sector following Labour's Autumn Budget announcement. The government's decision to introduce a 4% surcharge on rental income from April, doubling a measure previously scheduled by Chancellor Rachel Reeves, has sparked concerns about a potential shortage of housing stock. Experts warn this could lead to a 15% average rent increase by 2031, rising to 16% in London, adding over Β£2,500 annually to average rental costs. Shadow Housing Secretary Katie Lam has accused Labour of 'economic incompetence,' stating the policy will leave tenants 'fighting over fewer homes and facing ever-higher rents.' Savills residential research head Lucian Cook explained that as landlords exit the market, the remaining supply will become more concentrated, creating a 'wedge between the haves and the have-nots' within the private rented sector. The situation is exemplified by Julie Snowball, a 63-year-old tenant in Runcorn who has received an eviction notice for the second time in four years. Currently paying Β£725 monthly for a three-bedroom house, she faces finding accommodation at Β£850 or more, despite her council housing waitlist spanning 15 years. Industry data shows traditional buy-to-let investors are rapidly leaving the market, with former rentals now accounting for 15% of all homes on sale, while corporate developers increasingly supply luxury properties at premium prices. The Ministry of Housing, Communities and Local Government maintains there is 'no evidence of large numbers of landlords leaving,' citing their Renters' Rights Act as protection against excessive rent increases. However, with over 800,000 properties sold off since 2020 and the private rented sector's market share declining from 20.3% in 2016 to 19.5% today, the housing market faces significant challenges.