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No ‘mass exodus’ as landlords plan to hold properties for 10 years – Foundation

  • 13/07/2018
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No ‘mass exodus’ as landlords plan to hold properties for 10 years – Foundation
Landlords typically expect to remain in the market for at least 10 years, despite the raft of regulatory and tax changes hitting the sector, research has shown.


Three out of five landlords plan to stay in buy to let for six years or more, according to analysis by Foundation Home Loans for Mortgage Solutions.

Just 13% of landlords plan to leave the sector in the next five years, with only six per cent expecting to exit within the next two years.


Portfolio landlords plan for long-term

Portfolio landlords are more likely to have plans to stay in the market for the long term and expand their holdings, the research showed.

Almost two in five portfolio landlords say they intend to increase its size, compared to just 13% of non-portfolio investors.

London landlords appear most bullish, with a quarter expecting to increase their portfolios in next 12 months, followed by the West Midlands, with one in five looking to expand.

East Midlands landlords were most likely to be considering cutting back the size of their portfolios.

The stamp duty surcharge and the removal of tax relief on mortgage interest were the most common reasons for landlords reducing their portfolios.

Some also cited the complications of managing too many properties.

On the other hand, securing properties before an interest rate rise was the top reason for expanding portfolios.

The research also showed eight out of 10 buy-to-let owners have another job and are operating as a landlord on the side.

Investors typically earn £59,000 from their employment, the research found.


No mass exodus

Jeff Knight, marketing director for Foundation Home Loans, said: “It is clear the market is changing but we are certainly not seeing a mass exodus of landlords from the market.

“Our research shows that while there are landlords who will be selling up, there are plenty more who are passionate about remaining a landlord for the foreseeable future and many of whom will be looking to expand their portfolios even further.

“The key challenge for the industry is not about a shrinking market, it is about how it adapts to a changing market, with different types of landlords with different sets of needs and help required.”

Rachel Lumis, director at Xpress Mortgages, added: “The types of applications that do seem to have slowed down are the first-time landlords, there does not seem to be a queue of new clients looking to invest in the buy to let market like there was a few years ago.

“The recent changes along with the economic climate have certainly had an effect.

“One thing is certain, for those landlords who are staying put or expanding, a team of good professionals supporting you is a must, from accountants, tax adviser, solicitors to your mortgage adviser, it’s no longer for the dabbler or the faint-hearted, buy to let is serious business.”

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