Research from Together, which surveyed around 1,000 landlords, shows that 8% of landlords said they don’t think there will be any opportunities in the next 12 months and will halt their investment activity.
One of the main drivers cited by landlords leaving the sector was the heightened capital gains tax burden at 14%, while 12% pointed to rising interest rates and 8% pointed to proposed changes from the Renters’ Reform Bill.
However, around 29% of landlords said they are planning to grow or diversify their property portfolio.
Together said this shows that the buy-to-let (BTL) market “remains health[y] under the surface, albeit within a climate [that] favours landlords with larger portfolios and a level of liquidity allowing them to cope with cost pressures in the form of tax raises and expenses”.
Around 17% of those surveyed said the biggest challenge in the next year would be the rising cost of building materials, while 16% pointed to competition from overseas investors as well as BTL policy change from the Labour government.
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A further 15% of landlords said stamp duty increases were a big challenge and another 15% pointed to safety standards.
Ryan Etchells, chief commercial officer at Together commented: “BTL is a robust market and while the impact of cost pressures and wider regulatory changes is apparent, we are still seeing a healthy proportion of landlords riding out the wave and expanding their portfolios.
“There will likely be some smaller or amateur landlords who decide to sell off investments or exit completely, but in their position we are already seeing larger, professional landlords stepping in to seize diversified opportunities.”
He continued: “Until the final outcome of the Renters’ Reform Bill is known, there may be a bit more volatility as landlords assess the cost impact to them and their property plans this year. But, on the whole, it’s a changing of the guard rather than a mass exodus.
“A combination of more flexible BTL regulations and an agile lending sector can help landlords to manage their portfolios and ensure they are able to leverage all available opportunities – something the specialist sector is in a prime position to do.”
