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?
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:
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 yield||Percentage of landlords affected|
|0-5 per cent||20 per cent|
|5-10 per cent||9 per cent|
|10-15 per cent||3 per cent|
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.
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.
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