A growing number of landlords have sold up as rates on mortgages surge, according to data that showed tenants facing sharply rising rents amid a squeezed housing market. Estimates by the estate agent Savills showed that 25,000 homes in UK were sold by landlords between April and May, compared with 22,000 in the previous two months. The sell-off appears to have gained pace since the the height of the Covid pandemic, as landlords started to feel the pinch of rising costs and interest rates, which made new buy-to-let mortgages – particularly interest-only contracts – more expensive to repay. Official figures from HM Revenue and Customs – based on capital gains tax data – suggested that landlords sold 153,000 properties in 2021-22, 8.5% more than originally estimated. Savills said the data pointed to “an increase in buy-to-let landlords selling properties in the past two years, and the potential for properties to be leaving the sector”. That is despite a drop in property prices. According to separate figures shared by the estate agent Hamptons International, investors who sold a buy-to-let home in 2023 after 11 years of ownership made on average £94,800 more than they originally paid for the property. The amount was 10.1% down on the record average of £105,300 the year before. During the pandemic, parts of the property market ground to a halt as lockdowns curbed viewings and created economic uncertainty. Toby Parsloe, a research analyst at Savills, said: “The rise in residential disposals in capital gains tax receipts does point to a greater number of buy-to-let landlords selling up. The data also suggests this trend started earlier than previously thought, picking up pace since the market opened again in June 2021 after Covid. “We know mortgaged buy-to-let landlords have been hit by the double whammy of higher mortgage interest rates since the mini-budget and also the end of mortgage interest relief since 2020, which has reduced profitability to its lowest level since 2007.” While it was not clear whether the properties had been sold to other landlords, reinvested in other homes, or been taken off the rental market altogether, Parsloe said: “With more landlords expected to come off fixed rates in the coming months, there is a very real risk that more will be looking to exit the sector.” The trend has put further pressure on rental prices across England, Scotland and Wales. The cost of a new tenancy rose by 9.9% – or £116 – to £1,282 a month in the year to July. It was the 27th month in a row that annualised rental prices grew at a rate of more than 5%, according to Hamptons. “This prolonged period of growth leaves the average rent 28% higher than in February 2020, on the eve of the pandemic,” the estate agent said. However, Hamptons suggested it was unlikely that landlords would be willing to sell their properties for less than they originally paid – which could signal that the sell-off may have a floor. Just 6% of landlords have sold at a loss so far in 2023. While that was slightly higher than the 5% figure recorded last year, it was better than the 10% who sold at a loss in 2020.