Is the landlord exodus as bad as everyone thinks?

Is the landlord exodus as bad as everyone thinks?

0:02 AM, 25th September 2023, About 2 months ago 11

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We all hear about the landlord exodus but just how bad is it?

New figures from the Office for National Statistics (ONS) and estate agents Hamptons reveal that the trend of landlords selling up hasn’t been as big as many people believe.

However, since 2016, landlords have increasingly been selling more properties than they have bought due to a range of different factors.

Research by Hamptons reveals the difference between landlords buying and selling each year since 2010.

The estate agents used their data to track the share of homes bought and sold by landlords and then used these figures, alongside HMRC completion numbers, to estimate the total number of properties landlords across Great Britain were either buying or selling.

Since 2016 things have begun to change

The figures show that the trend of investors selling more properties than they bought wasn’t always the case.

In 2010, landlords sold only 38,190 properties compared to 119,230 that were purchased.

Similarly, in 2011 they continued to purchase properties at a high rate. Landlords sold only 57,770 properties compared to 124,160 that were purchased.

In the years that followed, landlords happily continued to buy properties rather than sell.

However, since 2016 things have begun to change.

Aneisha Beveridge, head of research at Hamptons, said when George Osborne announced that tax relief on mortgage interest for landlords would be phased out many landlords began to sell.

She told Property118: “This began in 2017 so some landlords started selling up beforehand – particularly if the changes pushed them into the 40% tax bracket.”

It’s no wonder because in 2016, property investors sold more than 195,000 properties compared to 159,850 that were purchased.

Tax changes biggest sucker punch to landlords

Rob Dix, co-founder of property advice website Property Hub, says the 2016 tax changes provided the biggest sucker punch to landlords.

He told This is Money: “Many landlords will feel that they are an easy target for politicians and therefore may be hit with further taxes that discourage them from further investment.

“With mortgage costs rising, the inability of individual landlords to offset interest costs is going to become more of an issue over the coming years.

“Reversing the policy will be politically unpopular, but there’s an outside chance that an incoming government will do it when they’re a long way from the next election.”

Section 24 isn’t the only factor for landlords selling up, reasons including high mortgage rates to selective licensing and other reasons are also at play.

Landlords face increased costs on all fronts

The average two-year buy to let fixed-rate mortgage currently stands at 6.63%, according to financial experts Moneyfacts, up from 2.94% two years ago.

The National Residential Landlords Association (NRLA) warns the supply crisis will get worse and more landlords will sell up.

Chris Norris, policy director at the NRLA, said: “Landlords face increased costs on all fronts, with profits at a 16-year low.

“Some have already seen their mortgage payments increase by almost 240% over the last two years.

“In this climate, it is no surprise that our latest research found landlords are more than twice as likely to sell up than they are to purchase properties. This will pile more pressure on a rental system already under significant strain.”

Higher mortgage interest rate since mini-budget

Estimates by the estate agent Savills showed that 25,000 homes in the UK were sold by landlords between April and May, compared with 22,000 in the previous two months.

The sell-off appears to have gained pace since the height of the Covid pandemic, as landlords started to feel the pinch of rising costs and interest rates, which made new BTL mortgages more expensive to repay.

Official figures from HM Revenue and Customs – based on capital gains tax data – suggested that landlords sold 153,000 properties in 2021-22, 8.5% more than originally estimated.

Recently, changes have also been made to capital gains tax thresholds, and in April 2023 the capital gains tax-free allowance was reduced from £12,300 to £6,000.

In April next year, this will decrease to £3,000.

Toby Parsloe, a research analyst at Savills, told the Guardian: “The rise in residential disposals in capital gains tax receipts does point to a greater number of buy to let landlords selling up.

“The data also suggests this trend started earlier than previously thought, picking up pace since the market reopened again in June 2020 after the first Covid lockdown.

“We know mortgaged buy to let landlords have been hit by the double whammy of higher mortgage interest rates since the mini-Budget and also the end of mortgage interest relief since 2020, which has reduced profitability to its lowest level since 2007.”

He added: “With more landlords expected to come off fixed rates in the coming months, there is a very real risk that more will be looking to exit the sector.”

Selective licensing trap

Across the country, property investors are also being caught in the selective licensing trap.

Mr Norris from the NRLA said it’s puzzling why some councils feel the need to establish selective licensing schemes.

He explains: “With the government already committed to introducing a property portal which will allow local authorities to look up landlords’ details, it’s unclear why some local authorities feel the need to establish selective licensing schemes which act as a tax on good landlords.”

Other critics of the selective licensing scheme include Ben Quaintrell, the founder of the estate agency group My Property Box.

He says: “Selective licensing in some areas can essentially be an unfair mandatory tax, and the councils run a real risk of driving up rents at a time of economic hardship.”

He believes that selective licensing could cause landlords to leave the private rented sector and adds: “Many landlords will have little choice but to pass on the quite considerable cost to tenants.

“Given the already substantial landlord legislation, it may even cause some to quit, leading to a greater shortage of rented properties.”

Number of new investors muted since 2016

According to Hamptons, so far this year, investors have sold 67,430 properties across the UK compared to 53,030 that have been purchased.

In 2022, 192,650 homes were sold by landlords, compared to 145,880 that were purchased.

Ms Beveridge says that the trend towards landlords opting to sell hasn’t yet become worse due to higher BTL mortgage rates – though this could still happen as more fixed rates expire.

She said: “While we haven’t seen a mass landlord sell-off, the number of new investors buying into the sector has been muted since 2016.

“And this is what’s causing the supply gap – there were 43% fewer homes available to rent across Great Britain in July than the same time in 2019.

“Consequently, there’s likely to be a net loss to the private rental sector this year with sales outpacing new purchases – the eighth year in a row.”


% of landlord sales and purchases each year (Great Britain)

Purchases Sales Net
2010 14% 4% 9%
2011 14% 7% 8%
2012 15% 8% 7%
2013 15% 8% 7%
2014 15% 10% 5%
2015 16% 15% 1%
2016 14% 16% -3%
2017 12% 16% -4%
2018 11% 16% -4%
2019 11% 14% -3%
2020 11% 13% -2%
2021 12% 14% -2%
2022 12% 16% -4%
2023 (Year to Date) 11% 14% -3%


Ms Beveridge explains the first table shows the percentage of homes purchased and sold by landlords across Great Britain.

She continues: “As you can see, there have only been very subtle signs that landlord sales have picked up in recent months.

“Although they’re still down year-on-year – landlords made up 14% of all sellers across Great Britain last month, down from 16% last year.  Whilst the figures are higher in London, again, proportionally there are fewer landlord sales than this time last year.

“Interestingly, on a year-to-date basis, landlord sales are down in every region apart from Scotland, which is where the government have taken a more robust approach to regulating the rental sector in recent years.”

Renters’ Reform Bill is expected to create a big change

New legislation changes such as the Renters (Reform) Bill are also causing landlords to sell up, according to one legal expert.

Gina Peters, the head of landlord and tenant at law firm Dutton Gregory, says new legislation will be a big change in the private rented sector.

Ms Peters said: “The Renters (Reform) Bill is expected to create a big change to the way landlords can regain possession of their properties.

“This comes at a time when the backlog in repossession cases to be heard at court is already at record levels.”

She urged the Government to find a solution that would make it financially viable for landlords to retain their buy to let portfolios, as it was critical to a healthy property market.

Ms Peters said: “Many of our clients are asking what’s next?

“The government needs to step up and find a solution so that it remains financially viable for landlords to retain their buy to let portfolio, as it’s critical to a healthy property market.”

Landlord exodus could soon become a reality

With the scrapping last week of energy performance certificate (EPC) rule targets by the Prime Minister Rishi Sunak, will this help property investors to remain in the market?

That remains to be seen but with many landlords already making expensive upgrades to their properties before the announcement was made, some may be feeling hard done by.

Whilst the landlord exodus may not be as big as we first feared, since 2016 investors have been selling up and the number of new investors coming into the market has been ‘muted’.

And with more legislation on the horizon, a feared landlord exodus from the private rented sector could soon become a serious reality.

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9:28 AM, 25th September 2023, About 2 months ago

I don’t know many landlords personally but those that I do know have either sold up, are selling up or have switched to Furnished Holiday Lets. The latter being a greater problem to the housing market than the other two. Houses turned over to FHLs are lost to the housing market whereas houses sold are still available - either to tenants or a homeowner.

The reasons that those I know have offered have been their ages (both in mid to late 60s), their health and that, given all of the rules and regulations and the fact that it may well be the top of the market, the timing seemed right.

Most of them have children (aged 30 to 45) who own their own homes but do not wish to become landlords. We all die in the end and it’s important to respect the wishes of those that will inherit out estates. My children are ok with becoming landlords at least, for as long as my tenants want to be tenants. In light of this, if properties become vacant, I will sell up. If they become vacant post my demise, my children have indicated they will sell up. I have asked that they don’t evict my tenants however, when I’m dead, I won’t have any control over that.


10:24 AM, 25th September 2023, About 2 months ago

Unless my maths is wrong, that's a cumulative net loss of 25% since the start of 2016. That sounds pretty significant to me. However, what has changed in the last year is landlord confidence and the number saying they are planning to sell. These figures could show a more dramatic swing by the end of 2014.


10:49 AM, 25th September 2023, About 2 months ago

If we add to the reduced supply highlighted in the above article to the reduced supply due to switch to air BandB (increase of 40% over 3 years according to ONS) and net migration of over 600k last year (the vast majority of which will be renting and not buying) we can easily see the rental crisis that is brewing in the UK - currently playing out in increased rents and virtually non-existent voids but this I feal is just the start those that need to rent are going to be in a very difficult place over the next decade thanks to crazy policies.

Kathlyn FitzPatrick

11:19 AM, 25th September 2023, About 2 months ago

I would like to have clarified the current reasons and percentages of landlords that are selling up. Is it mortgage costs, need to release the equity, fear over EPC legislation or something else?

None of these reasons affect me so l am not selling. If l did sell l would have to pay large amounts of capital gains and then put my money in the bank to be taxed again under inheritance tax (if Rishi does not abolish or reduce it.) So for me so long as l don't need care it doesn't make sense to sell.

Paul Essex

12:54 PM, 25th September 2023, About 2 months ago

Broad percentage figures hide significant detail

If you are looking for low cost family housing you may have a problem as this has essentially vanished in the south east. The remaining houses rents are heading towards 1000 pcm for even a two bedroom property.

If you consider high end flats in desirable areas they are still available although the rents have increased.

Fed Up Landlord

13:06 PM, 25th September 2023, About 2 months ago

13 down to 5. Eight PRS properties lost from one landlord. One bed flats in Halesowen West Midlands have gone from £450 two years ago to £675 now. A lot of LLs have had enough of being Shelter and Gen Rants punchbags and the governments cash cow and are voting with their feet. The aformentioned can all club together and house the thousands looking for somewhere to live.


14:32 PM, 25th September 2023, About 2 months ago

Reply to the comment left by Teessider at 25/09/2023 - 09:28
The best thing that could happen is the shrinking of the PRS! It’s a wake-up call , an epiphany for those idiots in power who need to know that the PRS is basic - as is the NHS and the police force and transport: necessities. It needs encouragement, not trampling over. Nurses and teachers need encouragement, not contempt too!
People need to be housed!
So stop discouraging those who house them! Landlords provide a service: it’s not just about money!
But the morons on both sides of the house can’t see it!


16:10 PM, 25th September 2023, About 2 months ago

The only LLs know personally who have sold are unmortgaged LLs who are close to retirement age and cashing in. They do not want the hassle of selective licencing where the council 'controls/ dictates' certain aspects of the property plus the hassle of not getting the property back quickly without S21so RRB has speeded up proceedings. Rents will keep going up as amateur LLs call it a day so supply reduced as result of overzealous councils and perceived fear of RRB.

Reluctant Landlord

16:20 PM, 25th September 2023, About 2 months ago

Reply to the comment left by Kathlyn FitzPatrick at 25/09/2023 - 11:19
money in bank to be taxed again on interest earned, THEN IHT....


18:36 PM, 25th September 2023, About 2 months ago

Reply to the comment left by Rerktyne at 25/09/2023 - 14:32
I agree that the PRS needs to shrink. Not to punish those in charge but because it doesn’t work very well.

Some landlords are far too emotionally involved. Some believe that evicting tenants with two months notice for no reason is perfectly reasonable. Some believe landlords are more worthy than tenants.

When interest rates rise, over-leveraged landlords race to sell or increase rents to cover mortgage costs. They should plan better.

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