Losses by investors on the sale of residential properties jumped by 32% to £1.15bn in the last tax year, according to analysis from Bowmore Wealth Group.

This was up from £870m a year earlier, based on HMRC data obtained by the firm.

Bowmore says the figures cover losses actually realised on the sale of residential property investments and do not include unrealised losses.

The analysis also excludes profits made by other investors.

Bowmore Financial Planning head of private clients David Floyd says buy-to-let investors have been hit by stagnant property prices across much of the UK and falling values in some markets, including London.

The firm points to Lloyds house price data showing prices were flat over the 12 months to September, while values in London fell by 2.2%.

Floyd says this has coincided with higher mortgage costs and the introduction of the Renters’ Rights Act, which he suggests may have prompted some landlords to sell even where that meant crystallising a loss.

He says: “Buy-to-let investors are looking at the growth in global stock markets and the high yields on UK government bonds and asking themselves if they should still be in an investment that has relatively low net yields.

“The Renters’ Rights Act may have also prompted BTL investors to sell up even if it means taking a loss.

“A lot of BTL investors found that the administrative burden of being a landlord, as opposed to being a stock market investor, was surprisingly high.

“That administrative burden and the costs of maintaining the stock left BTL investors with net yields that were fairly low and were flattered by house price inflation.

“However, house prices have now stalled and the prices of many flats have fallen sharply.

“The new Renters’ Rights Act added an extra level of jeopardy and risk into being a landlord.”