A combination of mooted increases in Capital Gains Tax, EPC minimum standards, interest rate rises, and increasingly legislation and regulation on rental properties is said to be contributing to record numbers of landlords selling up.
Data provided by property portal Rightmove suggests there is a general trend toward properties previously being available for rent, now being up for sale. 18% of houses now for sale were previously on the rental market, compared with 8% in 2010.
Prime Minister Sir Keir Starmer has warned the Autumn Budget on 30th October will be ‘painful’ with commentators predicting the Labour party will look at how it can claw back some of the concessions made by the previous Conservative government. With commitments to maintain VAT, national insurance contributions and income tax, Capital Gains Tax, Inheritance Tax, and pensions could follow the cuts already made to winter fuel payments.
In anticipation, Rightmove suggests landlords are selling up now to avoid paying more in the coming months.
Both the rental and sales sectors are still experiencing greater demand than supply; Rightmove say the number of new properties coming to the market for sale is 14% ahead of last year as a result of consumer confidence in the wake of the interest rate cut. But, says the portal, ‘there is still no glut of properties for sale’ – the number of new properties coming to market is a smaller 3% up on this time in 2019
Tim Bannister, Rightmove’s property expert, said
“In recent years it has become more attractive for some landlords to leave the rental sector rather than to continue to invest in it, due to rising costs, taxes, and legislation. A healthy private rented sector needs landlord investment to provide tenants with a good choice of homes. We’ve seen over the last few years how the supply and demand imbalance can contribute to rising rents, so there is a worry that without encouragement for landlords to stay in rather than leave the rental sector, it is tenants who will pay the price.
“However, despite the trend of more landlords choosing to sell up, it doesn’t appear to be a mass exodus, and we will need to monitor the longer-term impacts of what happens to the rental supply that is put up for sale. For example, these homes could provide first-time buyers with more choice. They might also be purchased by other landlords and put back into the rental market, which would signal a changing of the guard rather than a complete exit from landlords. In any case, we hope the government is considering ways it can support landlords and the private rented sector ahead of the Autumn Statement.”
