Hundreds of landlords are planning to release properties from their portfolios amidst challenging market conditions, a new survey has found.

The Simply Business Landlord Report, based on a survey of 1,455 UK landlords, shows that despite high demand for rental properties, 25 percent of landlords intend to sell an investment property in the next 12 months.

Looking back, one in 10 (nine percent) of landlords released a rental property from their portfolio in the last 12 months.

The South East, Wales and the South West were revealed as top areas for sales, while the North West, Scotland and the East of England emerged as the top regions for landlords buying properties across the UK.

Alan Thomas, UK CEO at insurance company Simply Business, commented: “A combination of economic uncertainty, changing regulations, and rising costs mean there’s no shortage of challenges facing the nation’s landlords in 2023. The cost of living crisis has affected all corners of society, and the buy-to-let sector is no different.

“Our inaugural UK Landlord Report shows that landlords see rising costs as the single biggest threat to the rental market. An ongoing theme in recent years has been uncertainty, with two-thirds (66 percent) telling us that constantly changing and confusing Government legislation is one of their greatest challenges.”

According to the survey findings, the selling hotspots per region include:

• South East: 14 percent
• Wales: 13 percent
• South West: 10 percent
• London: Nine percent
• Scotland: Nine percent
• East of England: Nine percent
• North West: Eight percent
• East Midlands: Seven percent
• North East: Seven percent
• Yorkshire and the Humber: Seven percent
• West Midlands: Six percent
• Northern Ireland: One percent.

Though constantly changing legislation was cited as the most common reason for putting property up for sale, rising costs across the board also proved to be a glaring challenge.

Almost one-third (31 percent) of landlords reported an increase in buy-to-let mortgage payments in the past year, with nearly one-fifth (19 percent) reporting that their mortgage repayments had risen by up to 501 percent.

Brian, a landlord in Yorkshire, said: "Being a private landlord in the UK has changed greatly over the years we have been doing it. In particular, the introduction of the premium on the stamp duty and the imposition of the new tax calculation based on turnover and not profit. The tax rules are at odds with the norm, and it is the only investment to be taxed in this way.

“There seems to be a distinct lack of forward planning, and I am concerned that as the sector contracts and the market becomes more competitive, we will see more people struggle to find affordable housing.”

Brian said both of his tenants expected him to serve a notice on them to leave as they knew his costs were going to increase.

Brian said: “I was lucky to be able to do something quickly, resulting in me being able to allow my tenants to live in relative security. But going forward if my tenants decide to leave, I will sell the house and never return to the private rental sector again.”

Despite the current climate, many landlords still consider rental property to be a worthwhile investment, with half (50 percent) saying that they would recommend investing in buy-to-let property.

Paul, a landlord in Warrington, said: "We originally invested in property as a long-term savings opportunity. With the current financial situation, we're actually finding that we are using some of the rental income to top up our regular income to help towards childcare and other high ticket expenses, so our property investment has helped us in that regard.

“We were lucky in that we agreed to five-year fixed rate mortgage terms so still have a few years across all properties to hopefully ride out the interest rate increases.”

Paul added: "I would say that being a landlord is currently a viable financial stream and certainly has its upsides - we have managed our properties and our income stream carefully.

“We have broadly seen the fruits of that labour whilst being able to provide safe, comfortable, affordable housing to our tenants. Whilst I know that at this moment in time, it is more difficult to operate profitably, I still feel that investing in rental property is a sound decision."