The number of landlords looking to sell property is falling due to rising tenant demand and strategies to manage the impact of tax changes. According to Paragon Mortgages’ latest Private Rented Sector Trends report, the number of landlords expecting to sell property has fallen from 25% in the past year to 17%. The government’s plans […]
The number of landlords looking to sell property is falling due to rising tenant demand and strategies to manage the impact of tax changes.
According to Paragon Mortgages’ latest Private Rented Sector Trends report, the number of landlords expecting to sell property has fallen from 25% in the past year to 17%.
The government’s plans to reduce tax relief on buy-to-let mortgage interest compounded by an increase in stamp duty on new purchases has provoked uncertainty amongst landlords.
However, as the tax relief changes edge nearer, landlords have begun to develop strategies to manage the impact of the changes.
Of the 204 landlords interviewed, 94% described tenant demand as stable or growing with fewer than one in 30 suggesting a decline.
Tenant demand continues to impact average void periods – which remain unchanged at 2.7 weeks – with 48% of respondents reporting that their properties stand empty for less than two weeks. Average yields also remained stable at 6.1%.
Among landlords expecting to purchase, these are most likely to buy terraced houses (62%), flats/maisonettes (31%) or semi-detached houses (23%). Notably, the proportion most likely to buy flats/maisonettes has decreased from 67% in the previous quarter.
John Heron, managing director at Paragon Mortgages, said: “With no material improvement in the supply of new housing against a background of strong population growth and household formation, it is no surprise that landlords are continuing to experience strong rental demand. It is promising therefore that there has been some improvement in landlord buying intentions albeit from a low base.
“Any boost this gives to improving supply to the sector, however, needs to be balanced against the additional upward pressure that we are likely to see in rents as a result of the phased impact of the changes to the taxation of rental income.”
