The government is being encouraged to urgently act to reverse the increasing trend of buy-to-let landlords exiting the private rented sector (PRS), owed largely to an increase in regulation and tax changes.
A number of BTL landlords have divested their portfolios and left the PRS in recent years and this has led to a sharp drop in the supply of much needed privately rented homes across many parts of the country.
According to the latest English Private Landlord Survey Report, 10% of landlords plan to sell all their properties and exit the PRS over the next two years, which is up from the 5% who replied in this manner when asked in 2018.
More than half – 55% – of those planning to sell up identified recent legislative changes, followed by forthcoming legislative alterations, such as the scrapping of Section 21, as the main reason for fleeing the market.
Overall, just 11% of landlords want to bring more property into their portfolio, while 12% want to decrease their number of properties. Almost half – 48% – of respondents have no plans to change the number of properties they own.
The survey also reveals that the average total gross rental income is £17,200, which is up on the £15,000 calculated in 2018.
More than half – 56% – of landlords have a rental income of less than £20,000 and 29% bring in between £20,000 and £49,999.
Landlords earning greater than £50,000 from their portfolio account for 15% of the survey participants.
The government estimates that, on average, landlords earn 47% of their total income from property – an increase on the 42% recorded in 2018.
Maxine Fothergill, ARLA Propertymark president, commented: “As highlighted in the report, a large proportion of private landlords are retired, and the majority take home a gross profit of £20,000 or less a year and rely on rent as an income.
“Consequently, as landlords are persistently hit with legislative and tax changes, financial obligations are growing and incentives are non-existent, pushing many to withdraw their homes from the sector.
“Landlords have reported within the survey that for those who are going to leave the sector, recent and forthcoming legislative changes were the driving key factor to doing so.
“Urgent action is needed from the UK government to maintain existing investment as any further reduction in supply could have a detrimental ramification for the housing sector and a rise in those facing homelessness will be inescapable.”
BREAKING NEWS Shelter & Generation Rent are scoring an own goal! The BBC suggested supply of rental property down 50% and prospective tenants are over bidding rents to try and secure a home. Strange really when you think the BBC have been part and parcel of the Landlord Bashing over the last few years supporting everything Shelter and the like have been going on about. The serious rot started when the Conservative Government decided they would abolish S21 at the behest of Shelter & Generation Rent. Of course it is not breaking news as it has been written about by landlords and agents for a few years now but perhaps the results so far are starting to be realised? Once S21 is abolished driving home to landlords they are losing control of their property more will exit. This has always been predictable unless of course you work in Whitehall or for a power hungry charity that does not own or provide any housing.
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Wait until the EPC C gets closer. That’s when it will hit the fan.
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Some readers will believe this is a good thing, that landlords leaving the sector will mean more owner-occupiers buying their own homes instead of paying rent. People with this “Fixed Pie” view, fail to understand that this is not how the housing market works. Landlords bring homes to the market. They renovate and convert homes to make more accommodation than was there before. Reducing landlords just reduces the choice for tenants, forcing rents up and standards down. It does nothing to help tenants, but councils rake in licence fees and somehow sleep soundly at night having made both rich and poor people in their communities worse off.
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its okay, they’re just ” Unintended – by the Govt, consequences ” not that it will be any relief to tenants !
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