A lot has changed for landlords in recent years. The same external factors that affect us all have taken a toll. On top of these, the landlord landscape has evolved. This primarily comes in the form of legislation changes. Some have come into action already, and the impact is being seen. On the other hand, there’s the speculative side.
More legislation is reportedly coming. It’s this that many landlords don’t want to gamble on. However, getting out of the landlord game isn’t always a bad thing. Of course, there’s less stress from emptying a portfolio in the current landscape. As well as this, now is a good time to sell a property in the UK. So, the exodus does make sense.
Changing the game for landlords
There are many stats in circulation showcasing a clear landlord exodus in the UK. It’s been found that one in three landlords are going to reduce their portfolios. Fewer than one in ten plan to expand their portfolios. This is all despite the increasing demand for rental properties.
It’s led to a rental market that’s 50,000 properties short of the pre-2020 count. Looking at the 2023 figures, there were 40 per cent fewer rental properties available than in 2019. That marks a decline of over 160,000 properties. The finger is often pointed towards the Renters Reform Bill and Section 24.
The Renters Reform Bill was aimed at enhancing the powers of renters. Unfortunately, many landlords see it as a major hindrance. Removing ‘no fault’ evictions entirely is on the table. It also would place a greater reliance on court rulings. Section 24 has long been seen as anti-landlord in its impact. There’s still a lot of uncertainty here.
Rental rates are at all-time highs. Some seven in ten agents report rent increases in recent years. However, the 2015 tax reform changed how landlords are taxed. Landlords can’t deduct mortgage payments from taxable income anymore. With mortgage rates rising, buy-to-let becomes difficult to swing.
Selling becomes easier for landlords
Many landlords see what’s happening to the rental market. It’s getting smaller. This won’t help to make rents any cheaper. It also won’t help as many people who plan to rent and save before getting on the property ladder. Some reports even relay landlords having a kind of guilt about selling, even though they now feel like it’s necessary.
For those who do need to sell, the process has become more streamlined. This is even the case for tenanted properties. Now, anyone selling a house with tenants has several viable options. Landlords can sell to a regular buyer. They can sell to a viable landlord to keep it in the rental market. Or, they can even sell to an online platform. This way, without hidden fees, landlords can sell up and get a free cash offer in minutes. Accepted offers can also be received in as little as seven days in some cases because the main platform operates in the UK. Right now, the UK housing market is also encouraging. In late May, it was reported that the average house price climbed to a record high of £375,000.
Given the pressures and opportunities, it makes sense that we’re now seeing a landlord exodus.
