Landlords selling up in frustration – Rightmove

12:05 PM, 17th October 2019, About 5 years ago 6

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New Rightmove research indicates 24% of landlords are planning to sell at least one property from their current portfolio, 13% will be selling more than one and 11% report they wish to sell their entire portfolio. This is despite rents being at record levels having increased by 2% in the last year.

Rightmove figures show the number of properties available to tenants in the UK is now down 13% on the previous low recorded in the third quarter of 2015, and London is 24% down. The blame for this being largely apportioned to section 24 mortgage interest relief restrictions significantly increasing costs for landlords and the tenant fees ban.

Conversely 30% of Landlords still consider property to offer the best return on investment and are planning on expanding their portfolios.

Statistically the average landlord contained within the report owns and lets three properties and a quarter of landlord only own one property.

Miles Shipside, Rightmove commercial director and housing market analyst said:

“There are a number of forces at play in the current rental market, all leading to record rents for tenants and fewer homes to choose from, yet demand remains strong. There are signs that the stock shortage may worsen if some landlords follow through with their plans to sell up.”

“Worryingly for tenants there are signs that the stock shortage may worsen if some landlords follow through with their plans to sell up, though an increase in plans for build to rent properties may help to fill some of the gap. The overall feeling among those landlords who are planning to exit the market is one of frustration with many telling us that the tax changes mean it’s no longer financially attractive to keep their properties.

“Early data seems to point to some of the income lost through the removal of tenant fees being passed on to the tenant in higher rents, but it should still work out cheaper than paying the upfront admin fees as long as stock doesn’t constrict and rents don’t rise too much. What we really need now is more properties available to rent. Rising rents may tempt some landlords back in, but momentum is currently to downsize portfolios in spite of the prospect of increasing yields.”

Landlord Tax Planning Consultancy is the core business activity of Property118 Limited (in association with Cotswold Barristers).

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Comments

10:29 AM, 18th October 2019, About 5 years ago

Rents may be up, yields may be on the up but so are costs. Interest rates are still very low. If we do get a good brexit deal chances are interest rates could move up. The legislative environment is unstable. Profit after tax I would suggest is still down.

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John McKay

10:53 AM, 18th October 2019, About 5 years ago

Reply to the comment left by SM at 18/10/2019 - 10:29
I'd suggest the opposite is true. A 'bad' Brexit deal would mean rates would come down, possibly even go negative.

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Gromit

11:00 AM, 18th October 2019, About 5 years ago

Surprisingly there's still lots of Landlords unaware of Sec.24 whose worst effects are yet to be felt.
When the tax bills next year hit the doormats in 20 months time dawn will break & the s**t will really hit the fan.
It'll be 6-12 months for action to be taken (increase rent or sell up), 1-2 years for the Government to realise there's a problem, and another year determine the causes and 6 months to enact something i.e. repeal Sec.24. Let say 2024!!

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david Brinsden

14:31 PM, 18th October 2019, About 5 years ago

I am getting ready to sell my 3rd property this year.
I didn't sign up to be an unpaid civil servant whether it's to check their status or to take on extra tax work or be a form filler.
I am diversifying in to small commercial properties or even lock up garages. Simples!

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Monty Bodkin

16:28 PM, 18th October 2019, About 5 years ago

Reply to the comment left by Gromit at 18/10/2019 - 11:00
"When the tax bills next year hit the doormats in 20 months time dawn will break & the s**t will really hit the fan."

I doubt it, it's a self-assessment. If landlords were unaware of it this year, there won't be a moment of revelation once it is fully implemented.

HMRC struggle to cope with those purposely evading tax on a large scale, they're not going to suddenly spring into action for the tens of thousands of ignorant amateurs underpaying by a few hundred quid.

It will take years, if not decades for S.24 to fully filter through.

I console myself with the thought of consistent, gradual, compounded rent increases for the foreseeable future.

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ben whitley

9:56 AM, 19th October 2019, About 5 years ago

Must admit rents are rising at very fast pace in my town which is more than making up for any down side at the moment, just increased one 10% and it was snapped up within 24hrs then another one came on at 10% more than mine .. not to mention just remortgaged new renovation at 2.5% fixed 5 yr no fees.. looking at a 55k house with 25% down at 2.5% is i think £62 odd a month and will rent at £475 crazy prices..

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