Landlords blame Tories for buy to let problems, says ...

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13 September 2023

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By Graham Norwood

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Landlords blame Tories for buy to let problems, says top agent

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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