Over a quarter of private sector landlords say they are planning to reduce their portfolio by at least one property before the end of 2020, according to research by landlord insurance provider Simply Business.
Indeed, the study’s findings suggest that this could lead to around half a million homes
entering the market over the course of the year, as a sizeable proportion of private landlords seek to distance themselves from the sector.
Additionally, it also revealed that 82% have no plans to add to their portfolio in 2020, with
many citing tax increases and government reform. For example, the new House in Multiple
Occupation (HMO) licensing rules, which added new stipulations on the minimum size of
rooms, while the ban on admin fees has also caused controversy.
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.”