According to a landlord survey from Together, which collated views from around 1,000 landlords, around 11% said they are planning to exit the market this year.
Within that figure, around 13% said they were blaming this on the increase in stamp duty and “being priced out of the market”.
Around 15% of respondents said the stamp duty hike was the “biggest challenge” to their property investment plans.
Some landlords said they are lobbying the government to go back on the decision to increase stamp duty for second homes and investment properties.
A quarter of landlords surveyed said the government should lower or reform stamp duty on additional properties to limit the loss of rental stock in the market.
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The Budget in October said the 3% surcharge on second homes and buy-to-let (BTL) investment properties would rise to 5%.
Around 61% of landlords are generally supportive of the new stamp duty regime, while 23% have called for reform on additional properties.
Half of landlords concerned about Labour’s plans
Around half of BTL landlords said they were concerned about Labour’s plans and future policies for the BTL sector, noting that they would negatively impact landlords.
Nearly two-thirds of landlords said they were positive about proposed changes to Energy Performance Certificates (EPCs) for the PRS and a quarter said they wanted the government to prioritise tax relief or financial incentives for landlords to make energy-efficiency upgrades.
Landlords on the whole – around 62% – said they supported the Renters’ Rights Bill, also supporting the ombudsman to oversee disputes and eviction cases.
A quarter said they wanted to see the Renters’ Rights Bill offer “greater balance between the landlords and tenants”.
Landlords looking at various ways to deal with rising costs
Nearly a quarter of landlords said they would apply for government or local authority incentives to help deal with rising costs associated with tax and regulatory changes.
A further quarter said they would also invest in energy-efficiency improvements to meet EPC requirements, with another 25% saying they would diversify into different property types or locations.
A quarter also added that they would absorb the costs and maintain current rental prices and 24% said they would increase the rent.
Changes to stamp duty will lead some landlords to ‘carefully consider’ property plans
Ryan Etchells, chief commercial officer at Together, said: “Higher stamp duty may trigger some individual, private landlords to carefully consider how these costs will impact their property plans.
“The government must consider the knock-on effect this will have on providing good-quality rental stock, which is a vital component of the housing market. With affordability for first-time buyers becoming ever more out of reach, a growing number of the population rely on rental properties. Constant attacks on the sector will only force landlords out of the market, reducing the number of properties available and forcing rent upwards, further impacting the ability to save for a deposit.
“As expected, nearly a quarter of landlords told us that the Labour government should prioritise ‘reducing or reforming’ stamp duty on additional properties in order for the sector to be financially viable.”
He continued: “That said, we have seen many amateur landlords decide to cut their losses and leave the market entirely, whilst many more are pivoting to the current climate. For example, we have seen many professional landlords looking to diversify their portfolios to spread the risk across residential classes as well as commercial sites.
“They are now turning to student accommodation; social housing, holiday lets and mixed-use units to broaden income streams. In particular, we are seeing more houses being converted to houses of multiple occupancy (HMOs), as these can sometimes offer a better yield than a single residency.
“Whilst it’s disappointing that the new stamp duty charges are now in place, our customers tell us that there are still plenty of opportunities out there. Demand for rental homes remains, and landlords who can evolve to address these challenges will surely find success.”
