Smaller landlords look to sell up and exit the PRS

Smaller landlords look to sell up and exit the PRS

0:04 AM, 12th December 2023, About 7 months ago 12

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Major structural changes are taking place in the UK’s private rented sector (PRS) with smaller landlords more likely to exit the market than those with larger portfolios.

According to The Deposit Protection Service (The DPS), 24.5% of landlords with one or two properties plan to sell up and leave the PRS, compared with 12.2% of those who have more than 10 properties.

Conversely, 13.5% of landlords with portfolios of more than 10 properties aim to buy more properties, compared with 5.6% of those who own one or two properties.

The survey shows that landlord business choices are having a significant impact on their plans for the PRS.

‘Showing a stronger commitment to the PRS’

The managing director at The DPS, Matt Trevett, said: “Whilst the volumes of tenancies we protect remains unchanged, the data suggest that landlords operating on a larger scale are showing a stronger commitment to the PRS compared with those with fewer properties.

“Landlords with a higher number of properties typically choose to place their businesses inside limited companies in order to better manage their costs, which are impacted by high interest rates and tax changes.”

He added: “We are also seeing different intentions emerge among landlords who use companies compared with those who don’t, suggesting that how a landlord chooses to organise their business has a significant impact on their attitude towards the market.”

Sell all their properties and exit the PRS

Of the landlords who intend to leave the PRS, 21.7% who are not set up as a business to rent out property, plan to sell all their properties and exit the PRS completely.

That compares with 10.3% of those who operate a limited company.

The survey also reveals that 24.1% of landlords who operate a limited company plan to buy more property, compared with 4.6% of those who are not set up as a limited firm.

Only 8% of landlords operating as sole traders plan to buy more rental properties – and 21.7% plan to sell all their properties and leave the PRS altogether, The DPS added.

The survey also showed that 35.8% of landlords renting out property that used to be their own home plan to sell all their properties and exit the PRS completely – compared with 18% of landlords that bought their property to rent out.


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Comments

Easy rider

10:40 AM, 12th December 2023, About 6 months ago

The problem that I have is that I have retired. The properties help to fund my retirement.

My rents are very low but they cover my costs. However, if I sold up and paid the tax and invested the proceeds in safe accounts, I’d be equally as well off but without the hassle of governments and Local Authorities.

My children had expressed an interest in becoming landlords when I shuffle off this mortal flip-flop. Today, due to the constant landlord-bashing, they would not want to become landlords.

My choices include selling up and leaving them the money in my Will or, burdening them with rental properties. If the latter, they’ll inherit good tenants, a repulsive government and incompetent Local Authority who seek to steal from those that work to reward the lazy and workshy.

Mr.A

14:01 PM, 12th December 2023, About 6 months ago

Likewise my children ( now grown up professionals) have also changed thier attitudes towards becoming landlords , a few years back they had shown a interest to take over from me but now with all these Anti landlord rules have decided ,who needs the bother ....
I've sold up except 2 ,which will go soon as well, because the Scottish government still has its head up its own ^#@£ to realise that the PRS is collapsing around thier Stupid constant new rules and regulations.
I feel sorry for the tenants, I really do .

JaSam

14:55 PM, 12th December 2023, About 6 months ago

Looks to me like George Osborne’s plan is coming to fruition. He wanted smaller & or unincorporated landlords out and that’s what’s happening. The PRS is going to change very quickly in the next decade the only thing is who will benefit from this change?

Michael Booth

19:59 PM, 12th December 2023, About 6 months ago

Same here 24 years and selling up 4 left.

Michael Booth

20:05 PM, 12th December 2023, About 6 months ago

Reply to the comment left by Easy rider at 12/12/2023 - 10:40Exactly same has me, try and do the right thing , sort your own life out in retirement for the rugto be pulled from under your feet.

GlanACC

18:56 PM, 13th December 2023, About 6 months ago

Sold 12, 6 left. Kids not interested in taking them on. Must be £1m of property there. I will keep them till I croak it or sell when each tenant leaves (no sign of that happening though). Might end up leaving them to Cats Protection.

Loraine Knights

20:57 PM, 16th December 2023, About 6 months ago

Exiting as and when they become vacant…..four sold two to go!

john thompson

17:31 PM, 17th December 2023, About 6 months ago

Reply to the comment left by Easy rider at 12/12/2023 - 10:40
Almost in the same boat.
Have 1 rental was planning to invest in more before I retire to help fund a better retirement pension.
Unfortunately now there is small profit or reward thanks as usual to government interference and meddling.
They favour big business and the lazy and feckless.
The majority of small eurpeners, business and hard workers keep the country running but are shafted by the system.
We were encouraged by the government to invest in property and help ourselves to better pension pots, only to be dumped on.
As others have pointed out Osborne wanted big coprate landlords in and the little guy's out, no matter the cost to small llandlords or tennants, and both will be shafted.
I will be getting out.

I will NEVER vote Conservative OR Labour again they are equally as destructive to us all who work hard.

Wayne Broadley

6:17 AM, 29th May 2024, About 4 weeks ago

The government are doing a good job at getting rid of the smaller landlords who only own 1 - 20 properties so their friends, the big companies can take over.

Getting close to retirement age here and have already offered 2 houses to tenants if they want to buy them but they can not get a mortgage.

I don't have kids to pass them along to but would like to keep a few for my retirement.

I'm not buying anymore houses and have just put 1 1/2 X the national house price into savings accounts instead of buying more houses.

I've no idea where the incompetent government expect people to live.

If they don't build a lot of more houses then all the millions of renters will finally realize that the government are the cause of the lack of homes and the rise in homelessness.

The big boys will only want the top tenants and anyone on housing benefit will be left with nowhere to live.

As said, there are some big changes coming to the PRS in the next 10 years and I hope that I'm not going to be in a position where I need to rent.

GlanACC

7:58 AM, 29th May 2024, About 4 weeks ago

Reply to the comment left by Wayne Broadley at 29/05/2024 - 06:17
Again .. The government DO NOT want the smaller landlord to leave the PRS, but due to their disjoined policies this is what is happening. The government know that the large corporations DO NOT want to house the kind of rubbish that the smaller landlord does. There is NO WAY the large corporations can ever replace 4.6 million rentals properties. YES they may replace 20% of them in the end, and in fact a lot of student housing has gone to large corporations (I think this is a good thing actually as they have their own special niche in the housing market) but social housing and non prime will NOT be taken up.

However, the way government policies are panning out will reduce the availability of properties to rent.

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