Private property landlords are planning to sell at least one property this year, citing diminishing earnings as reason.
Outcome from a recent research by Simply Business indicates that a quarter of the 800 responding landlords intend to sell at least one property this year, potentially flooding the property market with more than half a million homes for sale.
The survey also shows that because of the unstable condition of the market, 82% of the landlords have no plans of buying properties this year. 13% from the same group of respondents, however, have given indications of acquiring an additional property.
The brokerage also found that 35% of the property owners saw their rental income go down in the past year, while 26% of the respondents are expecting to see revenue from their estate to drop further this year. Despite that however, more than half of the respondents remain positive, expecting income from their rentals to increase in 2020.
Still from the survey, the main reasons why landlords are intending to sell their properties are:
* Tax increases and government reform Ex. Shifting House in Multiple Occupation (HMO) licensing - which added new stipulations on the minimum size of rooms, as well as banning of admin fees.
* Rising rental costs
* Cashing in on their investment
* Economic instability
* Lowing house price growth
From Bea Montoya, chief operating officer at Simply Business, said:
“Landlords around the country are telling us that government reforms, tax increases, and rising rental costs are forcing them to put their investments up for sale.
The tax increases imposed by the government are proving counter-productive for landlords, while ongoing political and economic uncertainty hasn’t been providing landlords with the confidence they need to stay in the market. But selling a buy-to-let is a big decision, especially if you’re selling more than one.
Any landlord looking to sell up should make sure they understand the complexities surrounding buy-to-let sales, particularly if the property is occupied. Any tenants should be made aware of plans to sell as early as possible, and given reassurance their tenancy still stands.
When it comes to selling, landlords need to understand any tax implications involved, such as capital gains tax. If the property is sold for more than it was paid for, there will be a capital gains tax liability.”