Buy-to-let landlords to sell up in droves

bury st edmunds  uk  march 10 ...
bury st edmunds uk march 10 ...

Buy-to-let landlords will unload half a million properties on to the market in the next 12 months, according to trade body the National Landlords Association (NLA).

Tax changes announced in the last year mean that landlords will no longer be able to claim mortgage interest tax relief, and will also have to pay a 3% stamp duty surcharge.

This means that landlords borrowing typical 75% of a property's value will find it hard, if not impossible, to make a profit in most areas of the UK.

And as a result, says NLA CEO Richard Lambert, landlords' confidence in buy-to-let (BTL) has collapsed to an all-time low.

"Two speeches from the Chancellor in 2015 have led to a crisis in confidence greater than when all but a few BTL products were immediately withdrawn from the market following the 2007 financial crash," he says.
Some larger investors have already started selling off properties - notably, the country's biggest buy-to-let landlords, Fergus and Judith Wilson, who are offloading more than 1,000 houses and flats.
"Common sense must prevail," Mr Wilson said.

The NLA now forecasts that, if the landlords it surveyed follow through on their intentions, there will be a dramatic sell-off of 500,000 properties in the next 12 months. This, it says, will be followed by another 100,000 sold each year to 2021, with the net effect of shrinking the private rented sector

by up to 136,000 properties.

This could appear good or bad news, depending on whether you're looking to rent or to buy. But, says Lambert, there may not be an upside at all.

"Up to half a million properties could come onto the market as a result of the Summer Budget and Autumn Statement, which the Chancellor will no doubt deem a success," he says.

"But there is no guarantee that these will be the one or two-bedroom flats or small houses that will appeal to first time buyers, especially as landlords are more likely to offload less desirable stock in less desirable areas.

"What happens to the people these landlords house if they still can't buy and there are fewer and fewer properties available to rent?"

Property Magnate on £250m Sale
Property Magnate on £250m Sale