More Landlords Than Ever are Selling Buy to Let Properties

While records on sales of buy to let properties have only been kept since 2015, April 2018 saw more landlords selling their buy to let properties than ever. ARLA Propertymark, the professional body representing letting agents, confirmed that five landlords sold up their properties at each branch in April. This is a rise from an average of four per branch the previous month. That in turn was the first rise seen since April the previous year. The figures revealed by ARLA Propertymark appear to be supported by the latest report from the Ministry of Housing. This report shows the number of privately-owned rental properties throughout England dropped to 4.79 million last year. This represents a loss of 46,000 properties – the biggest drop in 30 years. In 2001, just over two million private rental properties were available throughout England, according to data from the Ministry of Housing, Communities, and Local Government. So, while there has been a significant drop in the past year, there are still many more rental properties available than there were in 2001. “Many people have seen rents rise as landlords push up the rental charges to help cover the additional costs they are now facing,” said Darren Pescod, CEO of The Mortgage Broker Limited. “Regulatory changes and tax increases have made the buy to let market very difficult for many landlords. Some are offloading properties, as these figures show, while others have decided to up rents. Still more are considering getting rid of at least one property or giving up on the market altogether. For some, it may not be financially viable to continue.” Increased rents will also make it harder still for many renters to save up enough to afford a deposit on their own property. The idea behind many of the changes faced by landlords was to free up more properties for sale to buyers. However, further research from Simple Landlords Insurance has revealed the landlords most likely to leave the arena are those with just one property to their names. Those with several are more likely to remain in the business, perhaps even purchasing additional properties in future. 38% of people with at least two BTL properties confirmed this to be their plan, according to the research. As such, the available housing stock may not be around for very long. In uncertain times, house prices are stalling, and renters are struggling to find enough cash for the all-important deposit. It may be that landlords with larger portfolios are better able to take advantage of what could be a flood of properties coming onto the market. “It’s difficult to say what might happen next,” Darren Pescod added. “However, those renting from private landlords may well see a rise in their rents. Furthermore, I would expect to see more smaller landlords making the decision to quit the BTL market soon. It’s hard to see any other option for many of them.”

Published on 5 June 2018

See all posts in the Latest category