Menu

Call Us0333 0146 683
Knowledge centre

Buy-to-let market exodus: a quarter of UK landlords plan to sell up in 2020

2-minute read

Buy-to-let market exodus: a quarter of UK landlords plan to sell up in 2020
Lauren Hellicar

Lauren Hellicar

11 December 2019

A quarter (26 per cent) of landlords are looking to sell at least one buy-to-let property next year, according to new research by Simply Business.

In real terms, this could mean over half a million homes are put up for sale.

With the research also suggesting that over 80 per cent of landlords won’t be looking to take on any more buy-to-let investments, how will this affect the property market?

Why are landlords selling up?

The primary reasons landlords are saying enough is enough are, probably unsurprisingly, tax increases and government reform.

One of the main culprits is the shifting goalposts of House in Multiple Occupation (HMO) licensing, with more than 10 per cent saying this was a factor in their decision. There have been new rules on room sizes and a ban on charging tenants admin fees.

Other reasons include:

  • rising rental costs (10 per cent)
  • cashing in on their investment (9 per cent)
  • economic instability (5 per cent)
  • slowing house price growth (4 per cent)

Declining rental yields

Many landlords, it seems, are no longer able to maintain their profit margins, with over a third (35 per cent) reporting a decrease in their rental yield in 2019.

Responses to the survey revealed that well over a tenth of landlords have experienced a rental yield decrease of at least five per cent.

Decrease in rental yieldPercentage of landlords affected
0-5 per cent20 per cent
5-10 per cent9 per cent
10-15 per cent3 per cent

Landlords hopeful for 2020

More than half of landlords (52 per cent) are hopeful that rental yields will increase next year, while over a quarter (27 per cent) are less optimistic and believe a further decrease is coming.

A fifth (18 per cent) of landlords are expecting a rental yield decrease of 0-5 per cent, 6 per cent think they’ll go down by 5-10 per cent, but only 2 per cent believe there’ll be a decline of 10-15 per cent.

Things to consider if you plan to sell a rental property

If declining rental yields, government reforms, tax increases, and the rising cost of owning a rental property are making you think seriously about selling up, there are a few things to consider.

Selling a buy-to-let property is a big decision, so make sure it’s the right one for you.

What do you think will happen to the buy-to-let market in 2020? Let us know in the comments below.

Get set with tailored landlord cover

Over 200,000 UK landlord policies, a 9/10 customer rating and claims handled by an award-winning team. Looking to switch or start a new policy? Run a quick landlord insurance quote today.

Start your quote

Find this article useful? Spread the word.

Share
Tweet
Post

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter

© Copyright 2020 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.