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Sharp decline in buy-to-let landlords ‘likely to back fire on tenants’

Buy-to-let landlords are currently in retreat in the property market, leaving many prospective first-time buyers, including many existing tenants, in a better position to acquire a property, but that is a trend that could soon lead to an increase in rents, according to a leading property market analyst.

There are plenty of signs to suggest that landlords are withdrawing from the market, including the newly released TwentyCi National Homemover Audit that shows that there has been a 25% drop in property exchanges for properties bought for buy-to-let.

The decline is likely to be as a consequence of high stamp duty costs, the phasing out of mortgage interest relief, as well as tighter mortgage lending rules, which have forced banks and building societies to insist on greater rental cover and higher deposits.


The drop in buy-to-let purchases over the past year or so has naturally led to a fall in the number of homes coming onto the private rented sector, adding to the growing supply-demand imbalance in the market, which is likely to place upward pressure on rental values across many parts of the country.

Kate Faulkner, founder of PropertyChecklists.co.uk and consultancy Designs on Property Ltd, said: “It's interesting to see the impact of the government tax hikes on the landlord market. Although it may appear ‘good news' initially that there are fewer buy-to-let investors, this is likely to back fire on tenants as where there is a shortage of rental properties, rents may rise. However, it's also likely to hit the economy which is already slowing.

“A landlord spends thousands checking a property and letting it, supporting all manner of trades and letting experts.

“A loss of money in this sector will surely impact on earnings, and therefore on economic growth.”


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    The long term consequences are dire. A huge proportion of properties added to the lettings market come from landlords converting large house to HMOs, flats and bedsits. Plus the conversion of commercial properties to resi and long-term empty places brought back into use. There are many landlords that source land, obtain PP and manage a build. Now this will be curtailed, further adding to the housing crisis we are in.

    Just because GR blame BTL for their issues doesn't make it true. They need to open their eyes because it is their whining that gave Osborne the impetus to inflict further misery upon them. With £ signs in his eyes Hammond is reluctant to undo the legislation that is behind it all. This is despite the track record in Ireland showing what we can expect to happen in the UK. Does anyone ever learn??

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    Well I must say, this has all come as a complete shock to me. Had anybody else spotted these outcomes?!??


    I think some readers will miss your irony James

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    The Joseph Rowntree report just out has spotted that evictions are taking place mostly in London on tenants who are paying way below the market rate. We have been predicting this as a consequence for two years now, of Osborne's assault on the private rented sector. How do they think we can house people on really low rents when we are having potentially infinite effective tax rates imposed on us? The JRF report didn't mention that. It was an ideologically-driven report to please those who commissioned it - so the narrative is to implicitly blame landlords for being 'greedy' rather than addressing the reasons why landlords are starting to increase rents wherever they can in order to not go under.

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    • 08 August 2017 09:28 AM

    I hope mortgage lenders are going to welcome our ex tenants with open arms after eviction. (Caused by sect24). Will they waive any concerns about their age, or general desire to have never wanted a mortgage in the first place? Or will the local council be happy to throw their doors open to spare social housing?
    The government are living in a dream world over section 24. It is a nightmare unravelling for landlords and the private rented sector and the tenants. And it seems unstoppable.

  • Martin Fowler

    It can't be long now before the corruption that is clearly resident in Government is outed by some investigative journalist. It defies logic to suggest that so many of the changes that affect our industry and many others are done as the will of the people that elected them. MPs know their political lives are short, especially in Cabinet, and as if they are playing chess, they plan their game several moves ahead. We the pawns fall, while they advance themselves across the board. Tony Blair is a prime example, while the likes of Osborne are still playing the game. It is a shame there are so few genuinely decent politicians left.


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