Auctions show BTL landlords heading for the exit door

Over a third (38%) of My Auction’s current property lots are from buy-to-let investors looking to exit the market quickly, the online property portal has revealed.

The company’s market analysis shows that landlords with cash to buy could be the biggest winners in the current market. My Auction found that some landlords are willing to sell their investment property for up to 25% to 30% less than they might have sold for before, seeking the opportunity to get out of the market quickly.

Investment buyers are looking to achieve a rental yield of at least 8% for a property to be considered an attractive purchase, according to My Auction.

Over the last few months, the company’s records show that the most common type of property being sought by investors are two-bedroom flats (40%), followed by two/three bed houses (30%) and one-bedroom flats (15%). Some 15% of investment purchases’ have been homes of multiple occupancy. Despite often being more difficult to manage, HMOs remain popular because they tend to offer returns in the current market of around 8%, according to My Auction.

Stuart Collar-Brown, co-founder and director of My Auction, commented: “The interest rate rises have solidified and sped up the mass exodus of buy-to-let investors from the market. However, other contributing factors, such as the consistent changes in legislation and taxation surrounding landlords in this section of the market, have made it almost unviable for some landlords to retain their investment properties.

“Landlords who are cash rich have the added benefit of not being reliant on mortgage rate increases, so we are seeing many making lower offers due to their ability to transact very quickly in a falling market.”

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One Comment

  1. northernlandlord

    Can’t quite get my head around this one. Not clear if it relates to tenanted properties or vacant possession. Probably tenanted as vacant properties would generally go on the open market. It implies that as existing BTL landlords are selling up at a discount other investors ( surely just another name for BTL landlords) are snapping them up to continue to rent out (with the same or new tenants) if they can achieve an 8% return on a now discounted price. It that’s the case there is no overall exodus of landlords, just exchanging old ones for new ones. Perhaps the author can clarify this?

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