The number of landlords planning to sell some or all of their buy-to-let properties remains at an historic high, according to new research.
A fifth of landlords - 19% - said they would offload properties this year due primarily to the mortgage interest relief changes.
The survey of more than 1,000 private landlords suggests that a perfect storm of increasing demand from renters and landlords selling up will have a major impact on the market, which will inevitably place upward pressure on rental values.
The figures, from the National Landlords Association (NLA), show that up to 380,000 landlords are looking to sell property in the near future.
The data indicates that almost half - 45% - of landlords who intend to sell property in the coming year plan to sell individual flats and apartments, with a third - 33% - looking to sell terraced homes, which is bad news for renters, but potentially good news for first-time buyers.
Richard Lambert, CEO of the National Landlords Association (NLA), said: “These findings sound like positive news for potential new homeowners, but the reality is not everyone wants, or is in a position financially, to buy.
“In fact, if all these homes are sold as planned then it will lead to a significant fall in the supply of property available to those who choose to rent, or have no other option but to rent.”
The NLA has produced a video and discussion paper – the hustle for homes – about the relationship between landlords and first time buyers in the market.
Lambert added: “Everyone seems to have a gut instinct about the extent to which they feel landlords and first time buyers compete for homes in the UK, but homeownership is a highly emotive issue so the facts are often overlooked.
“There’s certainly no denying that competition exists, but the significant barriers to homeownership are more likely to be the high cost of a deposit or ability to access mortgage finance.
“With our new video and discussion paper we hope to provide more of an accurate picture of these issues, and importantly we want to focus the debate on what can be done to ensure that everyone has a roof over their head - regardless of whether they rent or own.”
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There seems to be a lack of consideration for tenants in my view.
I suspect a majority to BTL properties are held in areas of lower socioeconomics, where the prospects of home ownership may be naturally lower, perhaps in areas where there are higher rates of unemployment. That being said, where landlords dispose of their properties in these areas due to adverse tax implications, another family are out of a home looking for somewhere else to live. Their prospects of home ownership may never be possible, and have only the private rented sector to consider. Where there might already be a shortage of available rental housing, at the stage supply outstrips supply, this will drive rents up. Not to mention those landlords remaining in the game will likely need to increase rents anyway to meet increased costs.
All things considered, this tax move will likely create a shortage of rental properties and result in rents being driven higher and higher. The prospects of renters saving for home ownership deposits in the case where they have to sustain higher rents, becomes even more difficult.
well gary we can thank the short sighted government for this, i'm not selling, but my rents will be increasing to cover the extra costs being imposed on me, so yes at the end of the day it's the tenant that loses out.
For what it is worth I have 14 houses with families and their rents are already going up and will continue to do so simply to keep afloat. This government is causing a terrible situation for everyone and for no discernible purpose. My rents are on a pulley now and being cranked up hard wherever I can. I have zero choice. Section 24 consumes my life now and I am facing negative income by 2021 unless the rents go completely skywards. Tenants are in line for a proper bloody financial kicking alongside us landlords and I cannot make any sense of this.
There's a perfect storm brewing for Tenants especially those on benefits:
1. rents rising due to:
a.) s.24
b.) banning of tenant fees
c.) reduced rental stock as Landlords exit the PRS,
d.) new stock costing more due to 3% SDLT surcharge
e.) Selective Licensing
f.) minimum room sizing
2. Universal Credit which is already creating mayhem in the rental sector (both social and private). Effectively causing Landlords to shy away from offering houses to such Tenants.
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