Landlords Selling Up Because Of Legislation And Tax Changes

Most landlords planning to exit the private rented sector (PRS) within the next two years are driven by concerns over changing regulations and taxation, reports Property118.

The findings from The Deposit Protection Service (DPS) show that 47% of landlords are considering selling some or all of their properties. And 89% of these landlords identified legislative or regulatory changes as a key factor in their decision, a 4% increase since May.

The managing director at The DPS, Matt Trevett, said: “The proportion of landlords planning to exit the PRS altogether has remained largely static over the last few years, and the well-publicised shortage of rental properties continues. Our report shows that the legislative and taxation landscapes are becoming greater influences on landlords’ thinking, with just under 90% citing laws or tax as a key reason for their intended departure.

He added: “Rising materials costs — which have a direct impact on property maintenance prices — and the cost of buy to let mortgages are also affecting respondents’ plans.”

The firm’s ‘Private Rented Sector Review’ surveyed more than 1,200 landlords. It found that the proposed reforms to Section 21 ‘no-fault’ evictions and the Renters’ Rights Bill were the most influential factors for 94% and 91% of respondents, respectively. Capital gains tax changes also heavily influenced landlords, with 91% highlighting their impact.

The report found that 24% of landlords plan to sell all their properties in the next two years, while 23% intend to sell some. The survey also found that 30% of landlords who said they intend to sell said they were worried about falling property values had influenced their decision. The cost of BTL mortgages is a concern for 46% of respondents.

Almost two thirds (61%) of respondents said they had purchased all their properties to specifically use as rentals, while 30% had either inherited the property or had bought it originally as their main home. Of those questioned, 57% said they owned one or two rentals, with 38% owning between three and 10.