The number of properties acquired by buy-to-let investors using a mortgage will plummet by more than a quarter over the next five years, according to Savills.

The estate agent forecasts that the number of mortgaged buy-to-let investors will ‘fall most dramatically’ by 27% from the existing 75,000 a year to just 55,000 by the end of 2022 as tighter mortgage regulations, increased stamp duty charges and the phasing out of mortgage interest relief combine to restrict BTL investor activity. 

But while the phasing out of mortgage interest relief will deter many investors looking to take out a mortgage, Savills predicts that purchases by cash buyers will rise by 6%, with many investors increasingly looking to areas in northern England, where yields are typically higher.

“We have seen the earliest signs that some mortgaged buy to let investors may be selling stock,” said Lucian Cook, Savills head of residential research.

“Those entering the market will be looking very carefully at yields and that will put the spotlight on urban markets outside the capital,” he added.

Lawrence Bowles, Savills research analyst, said: “The rental outlook is strongest in regional cities that attract employees from high value sectors such as professional services, technology, and finance.”