The Renters Reform Bill is the latest of many factors leaving little choice for some private buy-to-let landlords but to sell up, a legal expert says.

Gina Peters, Head of Landlord and Tenant at Dutton Gregory, says many landlords have been asking whether it is actually beneficial being a landlord in 2023, due to all the constraints, lack of Government help, plus introduction of the Renters Reform Bill. 

She says Savills has found that 25,000 homes sold in the UK between April and May of this year, were by landlords.

Peters comments: “The recent increase in buy-to-let landlords selling their properties could see an alarming reduction in the number of privately rented homes, with private landlords expecting to bank more than if they were to keep their portfolios. 

“However, with more of the population being unable to afford to buy their own home, the UK’s dependency on the rental market is more so than ever. 

“This is a really uncertain time if you are a private landlord. Up to the year 2000, property owners were eligible for mortgage interest relief at source, which provided valuable tax relief for higher- rate taxpayers. 

“More recently, changes have also been made to capital gains tax thresholds, and in April 2023 the capital gains tax-free allowance was reduced from £12,300 to £6,000. In April 2024, this will be decreased to £3,000, meaning landlords will have to pay out more in capital gains tax when selling a property.

“Official figures from HM Revenue and Customs, based on capital gains tax data, saw that between 2021-2022, the sell up of properties by landlords was 8.5 per cent higher than what was expected, with 153,000 properties sold. It was also reported that 95% of letting agents had experienced their landlords selling at least one of their properties.

“Meanwhile, the Renters Reform Bill is expected to create a big change to the way landlords can regain possession of their properties. This comes at a time when the backlog in repossession cases to be heard at court is already at record levels.”

She continues: “Many of our clients are asking what’s next? 

“The Government needs to step up and find a solution so that it remains financially viable for landlords to retain their buy to let portfolio, as it’s critical to a healthy property market.”

Peters has specialised in residential landlord and tenant law for 22 years. She has advised clients through the Landlord and Tenant Act 1985, the Housing Act 1988 and 1996, and the Deregulation Act 2015 and now the 2023 Renters Reform Bill.