Landlords are reducing their stock - and they’re blaming the Tories for creating a hostile environment.
This is according to the latest research by London lettings agency Benham and Reeves which compared the size of investors’ portfolios between the first quarter of 2022 and the same quarter this year.
The research shows that: -
- Throughout England and Wales portfolio sizes have fallen by 5.6 per cent year-on-year, dropping from 9.1 to 8.6 - though the situation is far worse in some regions;
- In Wales, professional landlords seem to be leaving in droves, as portfolio sizes have fallen by a huge 42.9 per cent, from an average of 12.6 in 2022 to 7.2 in 2023;
- In England the worst affected region is the East Midlands, where landlords have typically reduced their portfolios by 33.9 per cent, from 11.8 to 7.8;
- Similarly there were major reductions in the North West, down 17.0 per cent, where average portfolio sizes dropped from 10.6 to 8.8.;
- This trend of reduced portfolios isn’t the case in every region, as in the East of England typical portfolio sizes have actually increased by 43.8 per cent year-on-year, from 6.4 in Q1 2022 to 9.2 in Q1 2023.
- There are also smaller increases in Yorkshire and the Humber, the South East and the West Midlands;
- The remaining six regions have all seen portfolio sizes fall.
Marc von Grundherr, director of Benham and Reeves, says: “It’s getting harder to be profitable as a landlord, and that impact is starting to show.
“Losing income tax relief had a big effect, while many investors are understandably worried about the upcoming changes to Capital Gains Tax, minimum EPC rules, and the elimination of Section 21 evictions.
“Declining portfolio sizes should act as a warning to the government. The tax landscape is unfairly balanced against landlords and unless the authorities want rental stock to continue falling in the years ahead, they may need to reverse some of these hostile policies which are driving professional landlords away.
“However, there are alternative challenges associated with offloading buy-to-let portfolio properties at present. While many of our landlords are disgruntled due to rising mortgage costs, they understand the difficulties of the resale market in the current climate. As a result, they are choosing to keep hold of their current investments for the mid-term until market values strengthen.”
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The Government should scrap the Renters Reform Bill. That won't cost them anything. It won't be a vote loser because they couldn't lose any more votes than they have already lost.
Gove doesn't care about elections. He's retiring from parliament anyway.
His motivations are twofold:
1. Providing opportunities for his contacts and friends in the corporate sector to sweep in and buy up the rental stock, in return for financial kickbacks in the promise of future lucrative directorships.
2. Satisfying his new found teenage friends who in his ongoing mid life crises episode, thinks are now his best friends (and lovers). Truth is, he's been honey trapped by devious Marxists who are preying on his confusion and his access to power.
After the election he'll wake up and find all these new hipster friends have suddenly deserted him leaving the rent unpaid.
Oldest trick in the book and there are still old fools in the Tory party who keep falling for it.
Couldn’t agree more and while they are at it, scrap the whole useless Department of Levelling up / down.
The same old story. Blame others. The tax system is challenging - in the same way it has been for trading companies for years. What is the answer? Not selling as that just crystallises big tax bills - compounding the situation - not to mention causing great anxiety for tenants. The solution for most is available - the problem is that only a few professional advisers know about it. Landlords are critically important to the economy but easy targets in the world of political spin. Stay strong. There are no other assets which allow such influence over income, capital growth and overall control.
But….. the item in all this which often goes unreported is that most landlords like myself, who purchased years ago, and have a number of mortgage free properties. …… Have just had enough 🤷♂️ We are in the age range for retiring and don’t need the hassle anymore 🤔 There are lots like me who have had a normal job, got a separate pension/savings etc, the sale of all my properties will just boost my savings, I have never needed the income as it was used to pay off the mortgages. We don’t think like portfolio investors.
I couldn't agree more with you Chris. The level of panic from many landlord's on here is too often ill informed and way, way over the top. There are strategic methods to minimalise the effects of Section 24 through incorporation and the Renters Reform Bill is coming. Period. It certainly holds no fears for me. S21 has required a Court hearing now for a number of years so the only change when seeking your property back is actually giving a reason for doing so. Why would that ever be a problem?
There is a reason large corporates and financial institutions are moving in to the sector and it's not to lose all their money! Capital growth will continue over the longer term and property will remain the fantastic investment that it always has been.
So the message is stop panicking, hold your properties and roll with the punches....as we do in all our aspects of life! So many of you will regret selling in years to come; I cast iron guarantee you that.
I can cast iron guarantee you John that we won't regret selling one bit if the alternative were to have sitting tenants.
Overall Control ? surely when Section 21 is outlawed and all existing and future tenants become sitting tenants for life with zero threat of eviction a property owner will have zero control over his/her property.
I am afraid that it is letting agents who play down the risks to landlords of the Renters Reform legislation.
in military terms we are at a question 4 moment - has the situation changed? Yes it has so its time to rethink the plan. The answer depends on many factors, not least your age. I am withdrawing slowly but surely because there are now other options for my money in retirement that seem much more appropriate for me. I am definatey not panicking!
Tricia - in military terms we need a managed-risk solution. Maintaining momentum and responding rapidly to changing circumstances is all. Whilst an ambitious, long term strategy is essential to deliver the required transformation. In the immediate
term, low-risk and assured capability delivery is essential.
Please enlighten me with the solution?
Cris.They are removing all control from us one of the main reasons landlords are getting out. I agree selling compounds the situation and fills the Governments pockets, so we are held to ransom and Tenants getting cheekier by the day because of all the anti. Landlord trash being fed to them by the ones that don’t supply any where to live.
Spot on again, Michael!
No mention of Scotland 🏴?
That is already a basket case 🆘
I have made the decision to exit currently as and when tenants vacate but considering evictions to sell
The Conservatives have simply laid the ground for even tougher times under Labour.
This is the real danger, they HATE 🤬 us, we are everything they consider wrong, the common person considering they can be better or more prosperous than the next 😩
We blame the Conservatives because they were in power at the time. If Labour had been in power we would most likely be even worse off!
@ Tricia. I agree completely. There are a number of ways that LLs add to housing stock:
1. As you point out they bring back long-term empty properties into use again.
2. They convert underutilised properties into smaller units such as flats, bedsits and HMOs.
3. They convert commercial buildings to residential use.
4. Some source land, apply for PP and build houses.
5. Landlords are sometimes criticised for buying new-builds but anyone could buy the property. Once it’s sold the developers get on and build another. They don’t build a whole housing estate at once.
6. If a landlord is involved anywhere in a chain where someone is buying a new-build they assist with the developer making a sale and getting on building another.
7. Landlords often put down deposits on off-plan developments thus giving the builder an interest-free loan, maybe for an extended period of time. You can google ‘Telegraph UK house building in jeopardy from landlord exodus’ for a recent article on this.
Of course we blame the Tories. Since 2015 they have attacked our industry at every opportunity. We have been subjected to totally unique taxation and numerous requirements homeowners don't face.
In the late 1990s and early 2000s BTL was a flourishing business accessible to just about anyone with a bit of ambition. Labour won the election on 1st May 1997. On that date I was a widowed single mum of 3 school age children. I had got a part time job in the railway ticket office 4 months earlier after being on Income Support for over 4 years. I got my taxi licence 5 weeks before the election.
By May 2002 I had 5 BTLs and housed 20 people. Several of my taxi driver colleagues also had multiple BTLs, every other tradesperson I came across either had a few or were actively looking for their first one. We were buying up properties that had deteriorated during the 1990s after the prices crashed in the late 1980s. These were properties that needed new kitchens, windows, rewiring, etc. One of mine had a big hole in the roof and another had just had squatters evicted. Mortgage lenders didn't seem to mind about such things. Finance was fairly easy to access. I even got a Council grant for 40% of the cost of sorting out the HMO that had had squatters. Everything just seemed to work seamlessly back then. We were actively encouraged and helped not threatened with fines and penalties or prevented from appropriately managing our businesses.
I don't think LLs get enough credit for bringing rundown properties back into habitable condition.
I think Chris is a secret agent on here. A secret letting agent...
I think Chris is a tax adviser, Nick.
If you Google him you'll find him on LinkedIn and can look at his website.
Panic is not the word I'd choose: Common sensed and ordely exit!
If it wasn't for CGT holding many to ransom the situation would be a gallop to get out of here...
The tories want to lose so labour can finish the job...
Rishi is a wef member and Keir of the Trilateral Commission
Democracy is a scam
John Thompson really how on earth can we be I’ll informed we are tracking every murmur for decades no least in recent years, give us some credit.
Have we crossed paths along the line some years back at those meetings Palmers Green areas or that side of North Circular, you were a Estate Agent with your son, sorry if you are not him but seems familiar and name sake.
The RRB is just the beginning.
If they get that passed they will want more.
Ultimately they want tenants to be able to control a property and only if the tenant wants to leave a property will a landlord be able to gain control of his asset.
If you still hold rental properties after this bill receives assent, then you must accept that your rental properties are effectively put into a form of " Escrow" where ownership and title belongs to the courts. You must be prepared to sacrifice those properties to eternal rental unless a tenant leaves on his own volition.
So if you're holding properties as pensions that you want to cash in later in retirement, or to move into yourself at some stage, or to leave as inheritance, you need to exit fast. Ultimately all those routes will be blocked.
Soon a property put onto the rental market won't be just until the Landlord wants out, and not even just for the landlord's life, its for eternity.
If all that happens there will be civil war and blood on the streets
I think Henry has made a very accurate assessment of the situation.
As per pre Section 21 Henry, back in the1970/80s when because of the fear of being straddled with a lifetime sitting tenant with rent controlled by the local council, a property owner needed to be a sandwich short of a picnic to consider letting a house, flat or even a room so properties to let were and will again become as rare as rocking horse droppings whilst rents for the few available will go into orbit along with homeless figures.
The talk above about panic is just nonsense, I am certainly not in a panic, just a slow resolve to exit the PRS in the next few years, no rush at all, but I have had enough and am cashing in my chips 🍟😂
Henry & David are right and under no illusion what the RRB is all about, simply confiscation of your property, that’s it full 🛑. Who is prepared to buy a property for some one else because this is what is being proposed, its off the scales.
It will cause a crash and destroy the economy I believe it has started already. It’s bad enough to see the High Streets collapsing all over the place and Businesses like Wilco going the wall because of internet purchasing etc, and a tin pot Mayor robbing Londoners of over £8m a day ULEZ + millions of fines, now I see cars that never move so many throwing in the towel and not going. eBikes dumped everywhere and extravagant cycles lanes not used taking up half the road causing traffic jambs, then charges congestion fee for the
blockage he caused. Those are treasonable policy’s as is this RRB urgent action required now to reduce the impact of the recession. I know exactly how it was when I was letting 78 to 88 no need for anyone to remind me I didn’t have a picnic or a sandwich.
Chris and John Thompson: incorporation is no panacea. If lots of private landlords incorporate to avoid S24, guess what? The Government will just change company tax law to ensure property-owning "investment" companies cannot deduct their debt interest changes in full, or they will be forced to pay a different rate of corporation tax. Also, it's tricky getting your money out of companies and dividends are taxed hard too.
As for large build to rent operators moving in, they are cherry-pickers, that's all. Their numbers are small and they charged premium rents. They don't serve the mass market, and like housing associations and council housing departments, they definitely don't operate HMOs. Why do you think HMOs are a purely PRS phenomenon, albeit being rapidly killed off? They are simply too much hassle for HAs and so on. Single people seeking budget houseshares and shared bills administered by the landlord don't meet their model of urban professionals in expensive flats or family housing.
Anthony my friend while I agree with most of your first paragraph and the Government will move the goal posts if too many landlords switch and make more one sided rules they always give you enough
rope to hang yourselves.
Regarding Build 2 Rent operators they at cherry pickers certainly not small but massive look around you every Town with the aim of taking over PRS with Government support and unfair competition. This is what THE RENTERS BILL is all about otherwise it’s not needed.
Regarding what you say about HM0’s I don’t understand about it being a PRS phenomenon as if it’s a choice, it’s a legal requirement and no way around it, or likely to get a penalty up to £30k and a Rent Repayment Order of up to 12 months rent if not licensed, (big boy’s probably exempt in Blocks of flats another dagger through the heart).
Hi,I hope you can give me some advice
I’m a landlord and I’ve got 2 properties in a Ltd company
I’m a working class guy and saved hard to buy my 1st BTL
After George Osbourne decided to reduce tax relief on 2nd homes I decided to start up a Ltd company and that company (me)had to pay 8k to transfer it over
A few years later after more saving bought another but from the Ltd company
I’m reading all of your comments and I really don’t know which way to turn
My tenants have just given a months notice(1st property)after 3 years,very few issues
I’m 57 now and feel I’m at a crossroads with these houses
Should I just sell the house and keep the 1
I’m in a contract with the other house for another 18 months
I always rented to professional people but they treated the house terribly so I handed the house over for 3 years to the letting agent for guaranteed rent and better rates
Everything has been good for 18 months and I’ll cross that bridge when the contract expires
I’m also concerned about the CGT
Thank You in advance
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