Record number of landlords exited the buy-to-let market in April
An increased number of landlords seem to abandon the private rented sector in the UK, according to the latest ARLA Propertymark report. Although remortgaging is close to record levels, a small percentage of investors are doing so to increase their portfolios. Majority admit that securing a better interest rate deal is of the utmost importance rather than raising capital, according to the latest remortgaging tracking index from Paragon.
In order to avoid a great raft of recent tax and legislation changes, many landlords sell their buy-to-let (BTL) properties. In April, letting agents saw the highest number of landlords selling their BTL properties since records began in 2015. It is quite evident that a lower profit and more expenses leave landlords a choice between two options; either increase the rents and risk to lose their existing tenants or exit the market.
As a result, tenants have experienced rent hikes of up to 26% in April, which is the highest since September 2017. At the same time, the number of prospective tenants continues to rise to 9% per branch according to ARLA, with agents having an average of 66 tenants on their books, which is the strongest demand since the previous September when there were 79.
David Cox, ARLA Propertymark chief executive, said: “The barrage of legislative changes landlords have faced over the past few years, combined with political uncertainty has meant the BTL market is becoming increasingly unattractive to investors.”
He further stated: “Landlords are either hiking rents for tenants or choosing to exit the market altogether to avoid facing the increased costs incurred. This, in turn, is hitting renters most, at a time when a huge number of people rely on the rented sector, and leaves us with the question of where will these people find alternative homes?”
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