BTL landlords begin leaving the market
Growing numbers of landlords are leaving the UK's buy to let market after tougher borrowing conditions and tax changes have taken effect.
The warning comes from the One Savings Bank's sales director John Eastgate who says that landlords with up to three properties are leaving.
He explained to one national newspaper: "The impact of tax changes is now starting to bite as the professionalisation of the sector continues."
The warning comes after official figures revealed there has been a steady decline in BTL loans being approved over the last eight months.
There was a 19.4% drop over that period with June showing the biggest fall.
Landlords in the UK
With 60% of landlords in the UK only renting out one property means as more leave, rents are set to rise because competition will decline.
Real estate firm Savills has also highlighted that over the past year 53,000 properties were sold with a buy to let mortgage - the biggest drop since 2007 and says more landlords are looking to sell-up.
The falls come after the effect of the 3% stamp duty surcharge and removing of tax relief for landlords to claim on their mortgage take effect.
The big issue, says Mr Eastgate, is that landlords will be completing their tax returns and will be finding they 'owe more tax than anticipated' and making them reconsider their BTL investment.
Landlords positive about the future
Meanwhile, a survey from estate agents Your Move has revealed that 52% of landlords are positive about the current market conditions.
Of the 1,100 landlords they surveyed, 16% were negative and 30% said they were ‘indifferent’ about the future.
Your Move also says that landlords care about maintenance costs for their property and whether it is going to make a long-term profit rather than worrying about Brexit or a tenant fees ban.
Landlords say they are going to tread water
Also, two in three landlords say they are going to tread water over the next year and are unlikely to sell any properties.
The firm's national lettings director, Martyn Alderton, said: "Most landlords are in it for the long term and providing much-needed homes for those who do not wish, or cannot afford to buy because of their lifestyle choices."
He added that it is 'great to see landlords being positive' about their future in the sector given the tax and regulatory changes that have occurred in the last few years.
