More new landlords replacing those quitting sector, survey shows

Nearly a million landlords plan to review their buy to let portfolios over the next two years with the number planning to sell outnumbering those planning to buy more properties.

This is according to new research from the Nottingham Building Society.

Its study found nearly two out of five landlords surveyed will be reviewing their portfolios with 20 per cent selling all or some of their portfolio, whilst 16 per cent aim to buy more properties over the next two years.

Regulatory issues are the biggest reason for landlords wanting to sell with more than half of would-be sellers interviewed blaming increasing regulation in the sector while 24 per cent say the end of tax relief on buy to let mortgages is driving them to sell.

The ability to earn a good income from buy-to-let is the main reason for landlords adding properties to their portfolios.  Some 83 per cent of those landlords interviewed who plan to buy more properties said this is a key reason for doing so, while 57 per cent believe rising property prices make buy to lets a good investment. 

Around 61 per cent say low interest rates for savings mean property is a better investment.

Tax changes in the buy-to-let sector have been one of the main factors making buy-to-let less attractive for some, including the scrapping of tax relief on mortgage expenses – previously landlords could offset mortgage costs against rental income – and restrictions on Private Residence Relief which reduced the Capital Gains Tax due on homes which people rented out after living in them.

But the research from The Nottingham shows millions who have never been landlords plan to buy a property over the next five years. 

Some 11 per cent of people surveyed with mortgages on their homes or who own them outright are thinking of becoming landlords in the next five years. 

Their main reason for potentially investing in buy-to-lets is the low rates available on cash savings – more than half say they want to put their cash into property to earn a better return while 48 per cent see buy to let as a good way to diversify their investments and 42 per cent are confident BTL will generate a good income.

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