Exodus of PRS landlords picks up pace

Interest rates are now returning to historically 'normal' levels so whilst disposal is really only an urgent necessity for highly geared landlords who have not carefully managed their debt to equity ratio over the years, any mass exodus will clearly benefit the more financially prudent landlord by forcing rents up as demand exceeds supply.

I believe it is enevitably that HMG, whatever colour, will have to change or reverse some of the policies hurting the PRS, to counter this otherwise there will be many more Local Authorities declaring a rental crisis - which is already impacting many areas across the UK.

"whilst disposal is really only an urgent necessity for highly geared landlords who have not carefully managed their debt to equity ratio over the years".

No, it isn't. I am not highly geared and several of my properties are mortgage free. I am selling from choice - because of current and pending legislation and I will not be told by Government that I cannot recover possession of my assets
at a time of my choosing. I have never and would never evict a good tenant, but am selling when they vacate as I am unwilling to take on new tenants with attendant risk of an expensive and stressful fight further down the line. I am old enough to remember the days pre ASTs, and the misery caused to the father of a good friend who could not get back his properties as the law was so tenant biased. I don't plan on going back there.

The anti landlord sentiment has gone too far and for too long - being vilified for providing good quality property and a good service is too disheartening.

I am looking forward to a quieter life, to not to be at the beck and call of tenants, and to put my money in the bank at a decent rate of interest and have no hassle. Yes I have to pay CGT, but on balance, that's a better option for me than hanging on.

The sooner government wakes up and realises that landlords have choices, the better.

Couldn't agree more. Clearly you have no such urgent necessity to sell, however, your behaviour will increase/improve returns for many, IMHO.

Perhaps the issue is that property returns are not quite as passive as they were?

They could point to the landlord exodus as market failure (haha) and then have more intervention against landlords.

That would be easier than defending why they are "helping" landlords.

"...the figures will prompt concerns about the UK’s rental sector."
It may prompt concerns but the main villains will not be concerned at all:
The Government, Shelter and Generation Rent.
They collectively did everything possible to get rid of the PRS small landlords.
That must be the ONLY government policy which actually succeeded. Hallelujah!

Government war on private Landlords:
1] Higher tax regime pushing some LL into 40%

2] Taper relief for inflation removed some years ago. So a large proportion CGT is a tax on inflationary appreciation = Not a real gain +Annual tax free CGT allowance halved by Hunt.

3] Min band C EPC so some ground floor flats need floor dug up & insulated, no account taken half electric from renewables. Tenants will need evicting. So costly most LL will sell up. Yet this is meant to be for the good of tenants !

4] Harder to evict bad tenants

5] 10% wear & tear allowance removed

6] Section 21 notice to end tenancies may be banned. Yet it's every owner's right to seek back their property. However In 30 years as LL I've never ever evicted a good tenant. I don't want vacant properties earning no rent. Ending S21 is trying to solve problem that doesn't exist.

7] Rising interest rates that make many properties non profitable & not worth keeping. So landlords will sell.

8] Complex legislation & costs being imposed on landlords based on assessments using incorrectly programmed EPC software. EPC software takes no account that all electric flats have lower carbon footprint than gas heated because about 45% of electricity now comes from renewables & this will increase.
Yet gas heated properties generally have a better EPC rating as gas is cheaper
This is because EPC software focuses on running cost, not carbon footprint.
Many landlords will sell up & walk away. I'm selling any of mine that can't attain band C.

Now add in legal net migration 606k last year +illegals = 5000 more homes needed every week.

Most people migrating to live in the UK move into rental property when they arrive. Most of my applicants for tenancies are people from abroad. Hard to find rental property in Southampton. More demand yet less rental properties due to this government's war on LLs.

This government are boosting the demand to an unprecedented level whilst throttling the supply with their war on private landlords. The rental sector's vital for people who might be in a city for couple of years so not worth them buying, migrants newly arrived, students or people who don't want to buy or can't afford to.
Where are they meant to live if there's no rental properties?

A serious crisis is looming unless government stops hounding landlords & starts to drastically reduce net migration.

The Parasites’ Paradise is upon us! Landlords should leave it and let the authorities deal with tenants!

Remember, this wouldn't be happening if the Government hadn't spooked the market. Another ill thought out plan with the ultimate losers being Tenants.

"However, BTL landlords who manage their properties through limited companies are exempt from capital gains tax – which means even more landlords could be selling than official data suggests."

Can anybody shed light on this?

Reply to the comment left by POLY Sykopetritis at 16/08/2023 - 19:21If a limited company sells a property asset at a profit, that gain is simply called a profit and is indistinguishable from a profit made from rent minus costs. ALL corporate profits, whatever their source, are then charged Corporation Tax.
So what the article is saying is that directors of limited companies may be selling their rental properties too, but we cannot tell because they are not subject to the Capital Gains Tax regime.