Brokers say that more than a quarter of their landlord clients plan to sell properties as a result of the red tape, regulation and increased tax burden.
A survey on broker forum Cheery has revealed that 28 per cent of landlord clients are planning to sell properties, while 39 per cent of Buy to Let investors say they will increase rents. Just over a quarter of landlords plan to make no changes to their investment in the current climate and only three per cent intend to buy more properties.
Donna Hopton, director at cherry, comments: “Recent turbulence in the money markets has impacted all mortgage clients, but Buy to Let has arguably been hit hardest given the detrimental impact that higher rates have on stress testing and the loan sizes available to property investors.
“If you then consider the stream of regulatory and tax changes that landlords have had to deal with in recent years, combined with upcoming EPC requirements, it’s unsurprising that so many are choosing to sell properties. However, there are also millions of landlords who remain committed to the market, and it’s a market of continued demand from tenants and rising rents, so there will be plenty of opportunity for property investors.”
Mike Cook, chief mortgage officer at MFS, says: “Rising interest rates, new EPC rules and the introduction of various regulatory changes in the PRS over recent years has naturally caused some landlords to consider their options. However, we should be wary of overstating the declining appeal of BTL – with huge demand from renters and long-term capital growth on offer, residential properties will continue to attract interest from a wide range of investors.
“The challenge right now is for landlords, brokers and lenders to work together for the greater good. It starts with flexible and competitive products, whether that’s bridging finance or BTL mortgages. Brokers and lenders must provide landlords with access to the capital they need to purchase, renovate, refurbish and improve the EPC ratings on properties. This will ensure a buoyant rental market and help drive up standards. Further, by delivering choice and transparency, lenders can also help landlords navigate the dual challenges of base rate hikes and rising inflation.”
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