Almost half of buy-to-let landlords want to leave sector



Almost half of buy-to-let landlords are looking to sell up, blaming recent tax and market changes, according to new research.


The latest research from Octopus Choice revealed 56% of buy-to-let investors want to keep or even buy more rental properties, while 44% are considering leaving the sector.


Of those looking to sell properties,  24% blamed smaller profit margins, 23% pointed to tax changes while 19% gave a cooling house market as the reason for getting out of the sector. Of those surveyed, 61% admitted they had underestimated the costs involved in buy-to-let.


According to the study by the peer-to-peer property lender, 60% of the 1,000 landlords asked said that property management had become a burden while three quarters said they think investing in buy-to-let in the capital will be less worthwhile in five years’ time.


Read more: UK property market value falls £27bn as Brexit hits consumer confidence


London landlords are facing the toughest choice on whether to sell up or stay in the market, according to Octopus Choice.


The company calculated that a typical buy-to-let property in London costs landlords over £1,250 a year for the first five years. For a landlord to break even, a London property worth £475,000 would need to be sold for £590,000 eight years later, something that is not guaranteed in the current stagnant market.


But despite one in five becoming disillusioned with the buy-to-let market, just over a quarter still, plan to invest money from selling up into their main property.


Sam Handfield-Jones, head of Octopus Choice, said: “Brits still have an incessant love affair with bricks and mortar – but the hassle and cost of buy-to-let is a source of growing frustration, and some landlords may find that their once-reliable day-to-day income is becoming harder and harder to come by. But this isn’t the case across all parts of the market, with money still to be made from the right property in the right region.”


Read more: Tax changes lead landlords to exit buy-to-let


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13th September 2018