The majority of UK landlords do not run their portfolios full-time. Around 60% of buy to let investors only own one property, which has made them vulnerable to recent government legislative changes. It’s estimated that 20% of these amateur landlords are planning to sell up and leave the buy to let sector in the next 12 months. If they do, it will release around £28 billion worth of property back on to the market.
Tough Times In the Private Rental Sector
The private rental sector is very tough right now. Many landlords have taken out mortgages to buy their investment properties. The phasing out of mortgage interest tax relief has made buy to let less profitable. And with interest rates creeping back up, not to mention tough new lending criteria for landlords, it’s hardly surprising that the sector is nowhere near as attractive as it once was.
Most smaller landlords moved into buy to let as a way to maximise their returns. Property values have risen steeply in recent years, and with savings interest rates at rock bottom, property has long been viewed as a better investment.
Property Pension Plan
Many of these landlords will have looked at the figures and concluded that they are better off selling up and re-investing their capital somewhere else. Landlords who bought into property as a pension plan might be better off putting that cash into their pension.
With so many properties set to come on to the market, it could make it easier and more affordable for first-time buyers to jump on the property ladder.