Saw the Savills figures doing the rounds this morning and I have to say they stopped me in my tracks.. 700 buy-to-let properties a day being listed for sale up to March. That is staggering even for someone who has watched this market for 25 years.
I’ve got four properties across Scotland and the north of England and I’d be lying if I said the thought hadn’t crossed my mind. The regulatory burden has gone from manageable to absurd in the space of about five years. RRA in England, the licensing regime up here, section 24 still eating into margins.. at some point the numbers just don’t work for the smaller operator.
That said I’m not convinced a fire sale is the answer either. Selling into a market flooded with other landlord stock seems like a good way to crystallise a loss. And who exactly is buying these properties?? First time buyers who can’t get a mortgage at 5.5%??
Anyone else actively weighing up whether to hold or fold?? Genuinely interested to hear from people in a similar boat rather than the usual ‘landlords deserve it’ brigade.. Cheers!
The smart ones sold eighteen months ago when the writing was on the wall. Holding now is just hoping the government blinks. They wont. Ive got the one flat I inherited and honestly if I could shift it quickly I probably would but its leasehold and the service charges put off half the buyers.
I would be cautious about that 700 a day figure without knowing how Savills counted it. If a portfolio landlord lists a block of twelve flats that could be twelve separate listings from one decision. The headline number is designed to grab attention and it has clearly worked. That said the direction of travel is obvious and I am not going to pretend the regulatory environment is anything other than hostile. My two in the Midlands are both mortgage free so the yield still makes sense, but if I were leveraged at current rates I would be looking very hard at the numbers. The irony is that every landlord who sells up removes a rental property from the market and pushes rents higher for the tenants the government claims to be protecting, but that is apparently too complicated a thought for policymakers to hold in their heads at the same time.
Government doesn’t care. Every BTL that sells to an owner-occupier is a homeownership stat they can wave around. Meanwhile housebuilding starts jumped 23% last quarter so they’ll point at that and say the supply side is being dealt with. Never mind that those builds won’t complete for two years and half the rental stock will have vanished by then. The maths doesn’t work but it doesn’t need to. It just needs to look like it works until the next election.
@GrumpyLandlord47 fair point on the methodology but I think you’re straining to find reasons to dismiss what is staring us all in the face.. I know four landlords personally in the Newcastle area who have sold everything in the last twelve months. Three of them had been in the game longer than I have. These aren’t speculators running for the exits, they’re people who did the sums and the sums stopped working.
Even if Savills double counted some portfolio listings the direction of travel is obvious. The tax changes, the RRA, the energy efficiency rules coming.. at some point you have to stop quibbling with the data and look out the window. My accountant told me last month that half his BTL clients are either selling or planning to sell within two years. Half!!
The question isn’t whether the numbers are exactly right. It’s whether anyone seriously thinks this reverses.