A rising number of landlords are selling off their properties and raising their rents in response to regulatory alterations and political uncertainty. These actions are in a direct response to the Brexit and General Election results.
19% of landlords with 20 or more rental properties has reduced the size of their rental property, according to a new survey from BDRC Continental – on behalf of Foundation Home Loans.
Portfolio Reduction
38% of landlords quizzed said that they had reviewed the size portfolios to make sure they could withstand rising costs. 7% said that they have sold off their properties, in order to reduce portfolio sizes or to diversify.
Apart from political uncertainty, a number of landlords have been deterred by recent tax alterations, including the 3% Stamp Duty surcharge and changes to mortgage interest tax relief.
The percentage of UK landlords who reviewed their portfolio size by region following the results were:
| UK | 38% |
| East of England | 40% |
| East Midlands | 50% |
| London (Central) | 45% |
| London (Outer) | 40% |
| North East | 43% |
| North West | 34% |
| Scotland | 35% |
| South East | 40% |
| South West | 38% |
| Wales | 32% |
| West Midlands | 35% |
| Yorkshire | 28% |
Rent Rises
Landlords in the East Midlands were found to have raised rents the most, with 41% here choosing to do so, more than the total average of 30%.
By region, the largest rent rises were recorded in:
| UK | 30% |
| East of England | 33% |
| East Midlands | 41% |
| London (Central) | 24% |
| London (Outer) | 24% |
| North East | 23% |
| North West | 35% |
| Scotland | 15% |
| South East | 33% |
| South West | 31% |
| Wales | 23% |
| West Midlands | 31% |
| Yorkshire | 31% |
Landlords increasing rents and reviewing portfolio sizes
Nearly three quarters (71%) of landlords said they had seen a fall in confidence.
Jeff Knight, Marketing Director at Foundation Home Loans, noted: ‘Landlords have been met with a raft of changes, from stamp duty charges to shifts in tax policy, and the lack of certainty on the political front has clouded the picture somewhat. The response has been to ‘batten down the hatches’, streamlining larger portfolios and protecting income by increasing rents – decisions that can be reviewed once the buy to let market is more accommodating.’
‘The fact remains that, whether it’s as a stepping stone to home ownership or a longer term lifestyle decision for tenants, the rental sector is an increasingly important part of the housing mix. This will ultimately be best served by a wide choice of property, and good landlords who can have confidence in decent returns.’[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2017/8/landlords-batten-down-the-hatches-and-increase-rents