Big rise in buy-to-let landlords returning to the market
There has been a significant rise in the number of buy-to-let landlords re-entering the market, according to data from estate agent haart.
The company put the leap down to landlords coming to terms with the “additional costs” imposed by recent government legislation that is aimed at regulating the sector but which many landlords believe is unfairly targeting them.
The number of landlords leaving the market has risen in the past three years as buy-to-let tax and legislative changes squeeze yields.
The recent figures from haart report that this trend is now reversing three years on from the government’s decision to introduce a 3% stamp duty surcharge on the purchase of additional homes, including buy-to-let properties.
According to haart, landlord registrations are up 8% on the month across England and Wales, led by a 12% gain in London.
But while the figure has steadied, the number of registrations is still down 22% on the year.
Sale prices to landlords are down by nearly 12% on the year, which haart say “maybe spurring on” the uptick. And while yields may be increasingly squeezed, buy-to-let properties remain a valuable investment, especially in comparison to the faltering stock market.
The market as a whole continued to gain momentum in March, with transactions in England and Wales are up 11% on the year while new buyer registrations climbing by 23%.
Paul Smith, CEO of haart, said: “Three years on from George Osborne introducing the 3% hike in stamp duty surcharges on second homes, landlords are beginning to come to terms with the additional costs and are cautiously entering the market again. Our branches across England and Wales saw a monthly uptick of 7.9% in the number of landlords registering to buy, a figure which has been continuing to grow since the start of 2019.
“Interestingly, sale prices to landlords are down by nearly 12% on the year which may be spurring on this activity, these price decreases could be causing the available stock to fall within lower stamp duty thresholds, making the stamp duty levy a little easier to stomach. Despite this, landlords are not back in their hundreds, the number of registrations is still down 22% on the year.
“Clearly investors are recognising the value that can still be found in buy-to-let property, especially in comparison to the overvalued and faltering stock market. Although the property market hinges on confidence, the FTSE 100, gold and cash are far more volatile to socioeconomic impact, so investors are increasingly returning to property where they deem their money safest, and where the yields are highest.