ARLA report a increasing number of landlords selling up

by Property 118

2 weeks ago

ARLA report a increasing number of landlords selling up

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ARLA report a increasing number of landlords selling up

ARLA Propertymark have analysed their sales and lettings data to reveal trends and expectations for 2018. This year the number of Buy to Let landlords selling their properties peaked in March and April when agents reported a 33% spike in the number of landlords selling up.

Rent increases are also up on last year. In August, the number of tenants experiencing rent hikes peaked at 35%, before falling to 27% in September. Rents for tenants were least likely to increase in October at 22%, but overall in 2017, 27% of tenants had their rents increased compared to 26% in 2016.

This is showing a rising trend of rent increases since the Summer Budget 2015 announcement of Section 24 mortgage interest relief restrictions.

David Cox, Chief Executive, ARLA Propertymark commented on the figures saying:

“Landlords are becoming more selective about their property investments in light of last year’s Stamp Duty Land Tax changes. Mortgage Interest Relief is starting to bite which is why we saw an increased number of landlords selling up. It’s likely that as we move into 2018, tenants will continue to see rent increases as supply starts to reduce, demand continues apace, and legislative changes increase costs for landlords.”

However, the supply of rental properties were at their highest in January, when it stood at 193. On average in 2016, the number of properties available per branch was 180, compared to 188 from January – October 2017.

Concerning this increase in supply David Cox said: “It was always going to be an interesting year, following the announcement of the letting agent fee ban in last November’s Autumn Statement. I think we’re starting to see a consolidation of some agencies in the industry as the fee ban looms, which could explain why the number of properties under management has increased.”

So it is fewer properties available to rent and also fewer agencies.

Comments

Annie Landlord

2 weeks ago

Section 24 and the continuing onslaught against landlords has forced me to revise my business and I will be selling two properties, possibly all of them. One is on the market at the moment. When I told my lovely tenant that I had to sell, he cried.
I am dreading telling my next tenant, who is a vulnerable lady. What are we supposed to do??

mia scot

2 weeks ago

I sold 4 in 2017 and plan to sell a minimum of 5 in 2018 - mostly housing benefit tenants with me for many years. I'm just tired of it all and plan to sell a total of 30 before section 24 is in full force. Might not come to full fruition but just hedging my bets and ruining lives needlessly.

Seriously considering moving abroad again and spending the next 30 years or whatever I have in the sun spending my money in a place where it wasn't earned - lucky Spain or wherever I go!

Section 24 has changed me probably for the better - it is no longer about money or tax it is all about enjoying what I have now.

Annie Landlord

2 weeks ago

Mia, I feel for you, and your tenants. This is something that has been inflicted on landlords and tenants alike, with no thought for the carnage it causes. Of course, government, councils and the media are determined to continue to blame 'heartless' landlords and we seem unable to get our voice heard. I hope you have a capital gains strategy if you are selling so many!

mia scot

2 weeks ago

Hi Annie

As I am in Scotland there have not been many with substantial gains. I will be selling the ones on the 4.95% interest rates with the lowest capital gains. Might make on a few and lose on some others so breaking even is fine. I invested in high yielding properties so the income has been great for many years, time to quit before I lose my shirt and nest egg. I will hang onto 30 high yielding flats until the mortgages end in around 10 yeas then most likely sell them too.

I was wondering, if any capital gains were achieved, could the profits be used to pay down the other mortgages without being subject to CGT? I do have a few with hundreds of thousands of equity that I won't sell due to the cgt but would if I could use the total sales proceeds to pay down loans which would help shelter me further from section24

Thanks

Mark Alexander

2 weeks ago

Reply to the comment left by mia scot at 06/12/2017 - 20:50
Mia, are you a sole owner with no spouse or adult children?

If not I may well be able to help you, please see our tax page.

mia scot

2 weeks ago

Hi Mark
You have seen my portfolio and made some suggestions which I should probably follow! However I am not ready to jump into any major reshuffle which may prove to be good or bad in the future. If we just had a crystal ball we could sort things.
I have been doing this for around 15 years and frankly can't be bothered with it any more. The days of waking up in the morning hungry for the next deal have long gone. I think the recession was the biggest eye opener and made folks realise they were not indestructible. We all read the books and listened to the gurus "properties have doubled in value every ten years since the seventies" my plan: buy sixty, sell thirty ten years later for double and pay off the bank with the proceeds. I would be left with 30 unencumbered flats giving a life long income, this was a major incentive. Unfortunately it didn't work out but it has been a good ride, I have done well and I do hope to continue doing well from the hard work I put in.
I am not hugely materialistic, didn't spend what I made so should be fairly comfortable despite the attack.
The recession and section24 and the constant barrage of rules forced upon us has taught me to cash in some chips, protect what I can, forget the fortunes that may be made and enjoy life. Not very philanthropic I know but I am who I am.
I am not convinced section24 will be rolled out fully, the country can't afford the devastation, the bank don't want my sixty (mostly) DSS tenants and flats - they are just shaking the tree and if 10 or 20% sell a load of flats they will have achieved their goal whatever that is!
Politicians should not be left to run countries - businessmen and women should be doing it.

Mark Alexander

2 weeks ago

Reply to the comment left by mia scot at 06/12/2017 - 22:20
I understand all of that.

None of us truly know what the future holds and we never have and never will.

We can only make plans based on hunches and and aspirations. That’s why we are where we are right now and why the decisions we make now will affect our future.

Good luck

Annie Landlord

A week ago

Reply to the comment left by mia scot at 06/12/2017 - 22:20
I like your thinking Mia. I'm retired and have a holiday home in the sun. I had assumed that my properties would have increased in value in 10 years, but they haven't. The annual income, however, my was primary goal and that has worked well. Go enjoy yourself!

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