2020 has been a challenging year for UK property investors. A global pandemic, lockdowns, redundancies and economic uncertainty have caused damage to bottom line yields as many tenants fall deeper into arears.

Why are landlord looking to sell their investment properties?

Leading cash home buying company Quick Move Now has reported a 60 percent rise in enquiries from landlords who are looking to sell.

The company, which offers an alternative solution to selling on the open market, says the increase has been recorded over the last three months as a result of increased financial pressure caused by unpaid rent.

Danny Luke, managing director at Quick Move Now, explains: “Many landlords are experiencing financial difficult as a result of tenants being unable to pay their rent. Due to government restrictions, however, they are unable to give notice to their tenants. They find themselves in a very challenging position. It has been reported that as many as half of all landlords are currently dealing with rent arrears.

“Sitting tenants in rent arrears make it incredibly difficult to sell investment properties and many landlords are unsure where to turn.

“We have also observed a 23 percent increase in the number of landlords wanting to sell flats. A greater number of people working from home means more tenants are choosing suburban homes with outdoor space over inner city apartments, leading to a significant drop in demand and surplus stock. We have also, of course, seen the cladding used on apartments becoming a growing issue. Without correct certification, many mortgage companies are refusing to lend on any apartment blocks with cladding. There is currently a big backlog in testing capacity, which means many property investors are only able to sell to cash buyers, which severely limits saleability.”

Is now a good time to sell investment property?

The market is still buoyant, with Nationwide building society reporting that house prices rose to a six year high at the end of 2020. However, the mortgage lender expects the property market to slow sharply after the first quarter of 2021.

With the stamp duty holiday due to end on 31 March 2021. Landlords thinking of selling, may need to act fast if they want to achieve a good return.