Financially-stretched landlords may want to think seriously about selling their investment properties - and quickly, advises Rightmove.
In its latest monthly report on asking prices, the portal has some candid advice for landlords too. It says that while rents are forecast to rise over the next 12 months in popular locations, thus improving landlords’ returns, some of the hoped-for increase in capital values may be dented in this sector once George Osborne’s stamp duty changes have gone through.
Rightmove commercial director Miles Shipside says: “Highly-geared landlords who are worried about the upcoming changes to mortgage interest tax relief should consider whether this is an opportune time to exit the market. They need to act quickly as buy-to-let investors looking to purchase will want to complete before the April deadline.”
“If a buy-to-let investor wants to buy the same property as a first-time buyer, their purchase costs are going to be three per cent higher if they do so post-April. That may mean their returns will not stack up to make it attractive, and they will potentially be at a disadvantage compared to would-be owner-occupiers looking to get onto the property ladder” he adds.
He also says anyone owning a property which would make a suitable buy to let unit, and who does not want to let it out themselves, should market it as soon as possible.
“[Such sellers] may be best advised to take advantage of any surge in investor activity and market as soon as possible. Given that the legal process could take six weeks or so once a buyer is found, they only have between now and the middle of February to take advantage of this artificially induced boost to buyer demand” claims Shipside.