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Are landlords selling up?

Journalist: Frances Ivens, Telegraph

ended 14. July 2023

Story for MailOnline/ This is Money.

The Bank of England's recent report suggests the average buy-to-let mortgage payment will increase by £275 a month.

Are you seeing landlords selling up to avoid increased mortgage costs?

Are you seeing any new landlords entering the market/ increasing their portfolio to take advantage of falling house prices and high rental demand?

5 responses from the Newspage community

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Riz Malik
Independent Financial Adviser at R3 Wealth
Some smaller landlords seem to be looking to deleverage their positions by putting their properties on the market and seeing what interest they get. These are mainly the ones who have not experienced turbulence in the property market before or who came into the market 'accidentally'. There is also a growing concern that if tenants are unable to pay their rent due to the current crisis, they still need to service the debt which may be an issue.

However, larger more experienced landlords are looking at the potential buying opportunity to add to their portfolios. Power has shifted to the buyer and they know they can call the shots.
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Elliott Culley
Director at Switch Mortgage Finance
We have seen an increase in Landlords holding just one property, deciding to sell up. It has become really hard, to make any profit on BTL properties in recent times and now with interest rates so high, landlords are struggling to fit affordability and in fact, are now making losses. This will most likely cause rent to increase and trying to find somewhere to live much harder.
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Gareth Davies
Director at South Coast Mortgage Services
Without question, we are seeing 'smaller' landlords sell or at least consider selling. It seems those that fall into the 'accidental' landlord bracket don't no longer want to deal with the increasing costs and aggravation that the BTL market is facing. Rate hikes, pending regulation changes and reduced tax breaks mean that for many now is the time to sell before property values fall. Most have seen their investment do extremely well over the last few years and feel now is the time to cash in and de-risk. Those that aren't selling are well-leveraged and not geared too high. They can stomach the increasing costs, however, this will naturally filter down to the tenant and rents are still on the increase.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
The widely predicted sell-off from landlords so far has failed to materialise with the majority now seemingly choosing to sit tight and consolidate what they already have whilst waiting and hoping for the current stormy times to pass.

Given the squeeze on cash flow from current rates there appears little evidence of landlords looking to expand their current portfolios however, with prohibitive and onerous government regulations a greater deterrent than the potential for higher rental prices due to increased demand.

In Scotland the additional dwelling supplement of 6% is a further constricting factor on landlord appetite to purchase but with signs of a softening of prices beginning to become more evident, it remains to be seen whether landlord inertia is just a temporary blip rather than permanent scar on the UK rental market.
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Stuart Cheetham
CEO at MPowered Mortgages
According to UK Finance, around two million landlords in the UK rely on a mortgage. Added to this, 80% of private landlords have less than 5 properties (just under half hold one), meaning that most can ill afford to weather financial challenges. With approximately 250,000 BTL mortgages set to mature and require refinancing in the next 12 months, the number of landlords beginning to realise that their portfolios are going to become a loss-making albatross is significant and rapidly growing.
The issue now is that the number of BTL mortgages are falling for the first time since records began, down 27,000 in the 6 months from November to April (1.35%). Whilst this might not sound huge, this was in a period when the bank base was still less than 3%.