Investors have long turned to residential property as a means of supplementing their income, supported by strong demand from tenants and stable yields.
But buy-to-let is no longer the investment of choice for many people, mainly due to tax and regulatory changes over the past couple of years, which largely explains why landlords in this country are now divided over their future.
New research by Octopus Choice has revealed that while 56% of buy-to-let investors want to keep or acquire more rental properties, 44% are looking to sell.
The study found that the majority of landlords still view buy-to-let as a money-making asset class but think it will be on the decline in the future.
As the market consolidates, buy-to-let owners are polarized across the country, with tough decisions to make on whether to stay or leave the sector.
For those looking to exit the market, 24% blamed falling yields and 23% tax changes, while 19% identified cooling house prices. Some 60% say that property management had become a burden and 61% undervalued the costs involved.
The research suggests that some people who are planning to sell their portfolio still want exposure to property as an asset class, with over a quarter - 27% - of those surveyed planning to invest the money 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.”
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b t l should be viewed as a long term investment and has worked really for me, it's not a get rich quick game, those that think it is will fail.
The 'right region' is the key.
I have been letting out properties for over 20 years and property prices are starting to rise now after years of stagnation, however, this is not reflected in increased rental income.
Where I am, the rents are low and unlikely to rise that much.
Coupled with the extra regulation we have her in Wales, which they don't have in England despite almost double rental rates in some areas, it is going to be increasingly challenging.
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