Uncertain market conditions, Government reforms and tax hikes are forcing large numbers of landlords to consider selling up, new research has revealed.
A survey of 800 landlords revealed a quarter planned to sell at least one of their properties in 2020 which could mean more than half a million homes go up for sale.
As many as 82% of those questioned said they were not planning to buy any more properties this year with only one in ten committing to an additional purchase.
The research by Simply Business, a landlord insurance provider, also found a third of landlords had seen a drop in their rental yield in 2019.
Reasons for the exit
One of the main factors impacting landlord’s negativity were tax increases and Government reform, said Simply Business.
There was concern, for example, over the shift in Houses in Multiple Occupation (HMO) licensing, which had added new stipulations on minimum room sizes and banned admin fees.
Rising rental costs, economic instability and slowing house price growth were other reasons cited by landlords who wanted to sell.
Bea Montoya, chief operating officer at Simply Business, said: “The tax increases imposed by the Government are proving counter-productive for landlords, while ongoing political and economic uncertainty hasn’t been providing landlords with the confidence they need to stay in the market.
“But selling and buy-to-let is a big decision, especially if you’re selling more than one.”
Advice for landlords
Landlords looking to sell up are being advised to ensure they understand the complexities surrounding buy-to-let sales, especially if the property is occupied.
Simply Business said any tenants should be made aware of plans to sell as early as possible and offered reassurance their tenancy still stands.
Montoya added: “When it comes to selling, landlords need to understand any tax implications involved, such as capital gains tax. If the property is sold for more than it was paid for, there will be a capital gains tax liability.”
