0:04 AM, 12th October 2023, About A year ago 14
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One-in-four landlords are planning to sell a property in the next 12 months as they face rising costs, tax increases and new legislation that could affect their business, a survey reveals.
The Simply Business Landlord Report 2023, which surveyed almost 1,500 landlords in August, shows that the buy to let market is facing several challenges that could force many landlords to exit the sector.
The key reason for selling is the prospect of the Renters (Reform) Bill which will scrap Section 21 evictions and make it easier for tenants to keep pets.
This was cited by 49% of those planning to sell.
The chief executive of Simply Business, Alan Thomas, said: “A combination of economic uncertainty, changing regulations, and rising costs means there’s no shortage of challenges facing the nation’s landlords in 2023.
“Landlords and tenants still need clarity from the government on the future of energy efficiency rules and more details about the Renters (Reform) Bill.
“Although the vast majority of landlords will welcome increased standards across the market, more details are needed so they can prepare for the biggest changes to tenancy law in a generation.”
He added: “Considering all this, it’s unsurprising that two-thirds of landlords are concerned about the future.
“That being said, the long-term stability offered by property ownership means that 50% still think buy to let is a good investment.”
Other reasons for landlords in the UK to sell up include rising interest rates and mortgage costs (43%), and tax increases (32%).
The report also found that almost one in 10 landlords have sold a property in the last 12 months.
The potential exodus of landlords from the rental market could have a negative impact on the supply and demand of rental properties, pushing up average rents, which are already at record highs, the report says.
According to Simply Business, more than two-fifths (42%) of landlords consider the rising cost of being a landlord as the single biggest threat to the buy to let market.
In fact, 31% have seen their monthly buy-to-let mortgage repayments increase in the last 12 months, with monthly repayments rising by £1,000 or more for 5% of landlords.
As a result, almost half (47%) of landlords have increased their tenants’ rent, while only 4% have lowered them.
The report also reveals how landlords feel about the Renters (Reform) Bill, which is expected to bring significant changes to the private rented sector (PRS).
The bill has been welcomed by many tenant groups and campaigners, who argue that it will improve the security and quality of renting.
However, many landlords are concerned about the implications of the bill for their business and their rights as property owners and the survey reveals:
Grumpy Doug
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Sign Up12:55 PM, 15th October 2023, About A year ago
Reply to the comment left by Shinh at 14/10/2023 - 22:14Hmm. So the family buying my soon to be ex-rental property is a figment of my imagination? They are selling their existing property to a young couple who are leaving home .... so net result is one less rental house. Oh and by the way it's an HMO so that's 4 adults now entering an already overheated market.
No landlords buying at the moment
Shinh
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Sign Up13:40 PM, 15th October 2023, About A year ago
Reply to the comment left by Grumpy Doug at 15/10/2023 - 12:55
Your 1 is not going to impact the net balance by a %.
I think there needs to be an analysis of how many btl homes have actually been removed from the total btl pool.
As btl landlords numbers may be dropping actual btl properties are stable. I dont believe the drop is close to 000s
As a guide we've taken on a few residential homes and let them out.
Hypothetically negating your 1.
Due unafordability by the owners who have moved into smaller accommodation whilst this current crisis pans out.
In parts of London 1 and 2 bed flats are the best rental investment now due to families down sizing from larger rentals or residential homes.
GlanACC
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Sign Up16:51 PM, 15th October 2023, About A year ago
Reply to the comment left by Shinh at 15/10/2023 - 13:40
In truth, no one knows exactly the number of landlords leaving the PRS. Anecdotal evidence from increased CGT receipts, estate agents and letting agents having reduced stock would suggest that the number of properties IS in the 1000's (I am one landlord but have sold 12 so far), you don't need many landlords with 4 or 5 properties selling up to make a 1000. Are new landlords buying properties, certainly YES but will it make up the shortfall, I doubt it. Any interest only landlords are going to feel the pain for many years to come.
Shinh
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Sign Up17:17 PM, 15th October 2023, About A year ago
Reply to the comment left by GlanACC at 15/10/2023 - 16:51
100% agree.
Only the sell side of btls is being promoted in the media not the buy side, why is this?
The narrative appears to spread gloom when in the major cities property funds are buying heavily based on 10 to 15 year exit strategies
We're aware of funds offering fractional ownership to spread the ownership amongst all of the public.! Were monthly returns and capital appreciation are being offered