Tax, Red Tape and Soaring Costs force landlords to qu...

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12 September 2023

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Tax, Red Tape and Soaring Costs force landlords to quit

A survey of thousands of landlords, agents and tenants has provided new evidence of buy to let investors quitting in droves.

Over the last 12 months, 95 per cent of letting agents saw at least one of their landlords sell at least one of their properties.

Nearly a quarter of letting agents saw up to 20 per cent of their landlords selling at least one of their properties.

And 80 per cent of letting agents said they expected more landlords to leave the sector in the next 12 months - 36 per cent said they believed it would be a “significant amount”.

According to the landlords themselves, 30 per cent said they had put at least one property up for sale. A further 17 per cent said they were considering doing so in the next 12 months, indicating a lack of confidence in the future of the rental market.

Landlords are overall feeling pessimistic about the Renters Reform Bill with 25 per cent feeling “very” pessimistic and 29 per cent feeling “somewhat pessimistic.”

Only 14 per cent of landlords are feeling at all optimistic.

Landlords hold negative views regarding the introduction of a new ombudsman - a key part of the Renters Reform Bill - with 43 per cent believing it would have a negative impact on the sector, and 22 per cent believing it would have a positive impact.

Conversely, 42 per cent of letting agents and 41 per cent of industry suppliers believe that it would have a positive impact.

There was also a strong level of landlord dissent about the Minimum Energy Efficiency Standard with two thirds saying that half of their properties or fewer meet current requirements.

The same survey - by PropTech suppliers Goodlord and Vouch - found that landlords were already measures to secure rental incomes through guarantors.

Some 60 per cent of landlords said they would ask for a guarantor if the tenant was on a salary that could affect the affordability of a property. A significant 16 per cent of landlords said they now required a tenant to provide a guarantor, regardless of salary.

And 33 per cent of 1,000 tenants who responded said they have been asked to provide a guarantor in their most recent tenancy agreement.

Goodlord chief executive William Reeve says: “This is our biggest report to date, both in terms of respondent size and the scope of topics covered.

“We’ve all felt the pressures facing the rental market over the last 12 months, but today’s report offers tangible evidence around what’s actually happening on the ground. We can see which forces are giving landlords pause for thought, where anxieties for tenants are coalescing, and how agents are preparing for change.

“The private rental sector is a vital part of our economy; we hope this report provides valuable insight to all of its stakeholders and encourages decision makers to take the steps which will boost confidence in the market, particularly for landlords.”

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