A record number of former rental properties are flooding the housing market as landlords scramble to sell ahead of a potential increase in capital gains tax, new data from property portal Rightmove reveals. The report shows that nearly one in five homes listed for sale in the UK were previously available to rent, marking a significant rise from 14% a year ago and just 8% in 2010.

The surge comes as speculation grows over possible changes in the government’s autumn budget, expected on 30 October. A proposed hike in capital gains tax, which applies to profits from selling assets such as second homes, could be driving landlords to offload properties. Currently, the tax-free allowance for capital gains stands at £3,000, with basic rate taxpayers facing an 18% tax on property sales and higher-rate taxpayers paying 24%. The Treasury is reportedly considering aligning capital gains tax with income tax rates, sparking concern among property investors.

London is experiencing the sharpest rise in rental homes hitting the market, with 29% of homes for sale in the capital having previously been available for rent. Scotland follows with 19% of its former rental stock now for sale.

Rightmove’s Tim Bannister noted that while there has been an uptick in landlords selling properties, it is not yet indicative of a mass exodus. “We’ll need to keep an eye on the long-term effects on rental supply,” he said, adding that homes currently being sold could be snapped up by first-time buyers or even by other landlords looking to expand their portfolios. This, he suggested, could result in a “changing of the guard” rather than a widespread exit from the market.

The property market has also seen a surge in new listings following the Bank of England’s recent decision to cut interest rates for the first time since March 2020, providing further incentive for sellers.

However, industry figures warn that government policies are placing increasing pressure on landlords. Angharad Trueman, president of ARLA Propertymark, voiced concerns that regulatory and financial challenges could be driving good landlords out of the sector. She highlighted the risk of squeezing the private rental market, warning that with the social housing sector stretched to capacity, many renters could face difficulties finding and affording homes.

As the housing market continues to respond to economic and political pressures, both tenants and prospective buyers await the outcome of the government’s autumn budget with bated breath.