Landlords twice as likely to sell property than buy
As tenant demand rose and the supply of rental properties became limited, rents increased by 5.3% in July, according to the Office for National Statistics. It is highly likely that these rental prices will continue to soar with landlords not expecting to see the rental supply crisis end soon.
According to a new study conducted by research consultancy BVA-BDRC and commissioned by the National Residential Landlords Association (NRLA), private landlords are more than twice as likely to sell properties than they are to purchase them.
Findings of the research revealed that 12% of landlords in England and Wales sold properties in the second quarter of this year while only 5% purchased properties during this same period.
🆕Landlords are twice as likely to sell property as buy, according to new @BVA_BDRC research, for NRLA. In quarter two of 2023:
— NRLA - National Residential Landlords Association (@NRLAssociation) August 18, 2023
➡️12% of #landlords in England and Wales sold properties and just 5% purchased properties
➡️ Two-thirds of landlords polled said demand had increased pic.twitter.com/mU0w73DpLU
The study also showed that 37% of landlords planned to cut the number of properties they let over the coming year, meaning that the proportion of landlords who planned to downsize their portfolio was at an all-time high. Only 8% said they planned to increase the number of properties they let in the market.
Meanwhile, two thirds, or 67%, of landlords surveyed reported that tenant demand had increased in the second quarter of the year – another all-time high.
Amid growing mortgage costs and ongoing uncertainty about proposed reforms for the private rented sector, the NRLA warns that the supply crisis will only deepen without urgent action from the government.
The landlord association continues to call for ministers to scrap tax changes which, according to them, deliberately seek to deter landlords from investing in desperately needed private rented accommodation. This includes the 3% stamp duty levy on the purchase of homes to rent out, as well as the decision to restrict mortgage interest relief on long-term homes to rent.
“While the Chancellor has developed a mortgage charter to help homeowners, the lack of assistance for renters and their landlords is clear for all to see,” commented Ben Beadle, chief executive of the National Residential Landlords Association. “Households renting privately are facing the full force of the supply crisis, and change is needed now to prevent the situation from worsening over the next 12 months.
“The government must reverse its damaging tax hikes on the sector. It is frankly absurd to have a tax system that punishes landlords for providing the homes tenants so desperately need, while favouring holiday lets.”
In a response to a landlord petition earlier this year, the UK government said that while it recognised that the private rented sector played an important role in the UK housing market and economy, it also had a responsibility to make sure that the tax system was fair.
“The Government understands that people, including those who rent property, are worried about the cost-of-living challenges ahead – that is why decisive action has been taken to support households across the UK, while remaining fiscally responsible,” part of the statement from the HM Treasury read.
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