About 20 per cent of the landlords registered with the UK’s NLA (National Landlords Association) intend to downsize their residential property portfolio this year.

The NLA attributed this development to the withdrawal of mortgage interest relief for higher and additional rate tax payers; 3 per cent surcharge on purchases of additional property and the restriction on upfront letting fees for tenants. The reasons are depicted in the form of video content based on research conducted by Capital Economics.

“More and more people are relying on this sector for a home, so it is vital that landlords not only provide a high standard of accommodation, but are incentivised to do so by the prospects of a reasonable return on investment,” NLA said in a statement.

It also means that more number of properties from the private rented sector will enter the housing market, which is currently facing inadequate supply resulting in price inflation. The lack of housing stock is preventing several first-time buyers from climbing the housing ladder, especially in London.

There is another view that the private rented sector could be affected if the landlords went ahead with their decision to dispose additional properties. The impact of the decision needs to be studied in-depth by the stakeholders of the housing sector in the UK.