The launch of the second phase of Help to Buy could drive average monthly rents down by as much as 5pc, according to a leading estate agency.
Chesterton Humberts said the government scheme, which guarantees part of the mortgage for buyers with small deposits, will attract people out of the private rental market in favour of homeownership.
This will create more competition between landlords who want to secure good quality tenants and is likely to push average rents down, the estate agency said.
Richard Davies, residential operations director at Chesterton Humberts, said: “More landlords may find their tenant(s) giving notice as they move away from the private rented sector and into home ownership.
“Dependent on the scale of first time buyers taking advantage of the Help to Buy scheme, this could seriously impact the number of rental properties coming to the market for reletting which could in turn see rental levels fall.”