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TODAY'S OTHER NEWS

Buy To Let Gloom - over quarter of landlords may sell in 2020

Some 26 per cent of buy to let investors plan to sell one or more of their properties in 2020 according to a survey by insurance firm Simply Business. 

The survey of 800 investors revealed that because of continued economic uncertainty and the tax restrictions increasing around buy to let, some 82 per cent of landlords are not buying any more BTL properties in 2020. 

Just 13 per cent said they would buy another property this year.

The top reasons landlords gave for wanting to sell are tax increases and government reform as well as banning of admin fees.

Other reasons that landlords gave for planning to sell include rising rental costs (10 per cent), cashing in on their investment (nine per cent), economic instability (five per cent) and slowing house price growth (four per cent). 

This comes after a third also reported a decrease in their rental yield in 2019, which adds to the desire to sell. 

Looking ahead to this year, over a quarter (27 per cent) of landlords expect to see a further decrease in their rental yield in 2020 while a fifth expect to see a yield decrease of five per cent or less, and a further six per cent of landlords expect to see a decrease of between five and 10 per cent. 

Only two per cent of landlords expect to see a decrease of between 10 and 15 per cent. 

“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” says Bea Montoya, chief operating officer at Simply Business. 

“Any tenants should be made aware of plans to sell as early as possible, and given reassurance their tenancy still stands. 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.”

Poll: Do you believe a quarter of landlords will sell at least one property this year?

PLACE YOUR VOTE BELOW

  • James B

    Shame shelter aren’t interested in this stuff .. vested interest I think it’s called

  • icon

    Seeing agents this week with a view to selling 4 this year it’s just not worth it anymore no money on it if you are mortgaged landlord at the end literally been bled dry by tax regulation and keeping up with Repairs waste of time

  • Kristjan Byfield

    A sensationalist piece that does nothing but stoke the fires of concern by landlords. Yes, BTL is tougher than it has been but....around 50% of landlords have no mortgage (so no impact of mortgage relief going), most private landlords I know didn't charge fees to tenants (main impact was felt by the industry), yields are generally still good although probably lowest they've been in London- but offset there is capital. With banks paying no interest can anyone highlight another sound investment strategy for family/pension than a property that offers a sound balance of security and reward? We havent had a single client even murmur about selling this year and several have stated interest in growing their portfolio.

  • Noel Wood

    I agree with Kristjan above. If you don't have a mortgage then BTL is great investment. If you do, and you are not incorporated, then it is a challenge particularly if and when interest rates move up. I was highly geared with 30 BTL properties in my own name built up over 20 years, I have off loaded 14 to date with the aim of selling 4 more in the next 24 - 36 months. There has been zero capital growth in our area so CGT not a big issue with many properties. If you can have an unencumbered portfolio then the prospects for BTL are good as the supply reduces and the resultant upward pressure on rents.

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