The Residential Landlords Association (RLA) report one in five landlords (22%) plan to sell at least one property from their portfolio over the coming year, with just 18% planning to buy additional properties to rent. They say tenants face a “perfect storm” with the supply of homes to rent set to fall as demand increases. Over the last year, the RLA found that 43% of landlords had increased rents and that 47% planned to increase them in the year ahead.

 

Nationwide has reported a sharp fall in mortgage lending, mainly due to making fewer buy-to-let loans. Nationwide had a 13% share of the mortgage market in the quarter, down from 15% last year. A spokesman said it expected its buy-to-let lending to remain “broadly flat” and Nationwide had “raised the bar for landlord’s affordability before most other lenders, with the aim of helping ensure our borrowers can meet future repayments. This, together with… Stamp Duty and tax changes, led to a decline in buy-to-let.”

Despite the tax rises imposed on the private rental sector, it seems property will remain a safe long-term investment for the 2 million or so buy-to-let landlords in Britain. 59% of landlords surveyed by Knight Knox, are still confident in renting out property as a source of income, and just 11% of landlords have lost confidence in buy-to-let. Close to six million properties in the UK are now in the private rented sector, with this expected to rise to 7.2 million by 2025, or a quarter of all homes.

 

Former Bank of England economist, Professor David Miles, has called politicians’ scapegoating of landlords for spiralling house prices ‘profoundly wrongheaded’. He said the government’s recent move to push up costs for landlords and make buy-to-let less attractive, would serve only to push up rents and make it even harder for young people to save for a deposit. Last year he warned that landlords in the higher rate tax bracket might need their rental income to rise by 25-30% to maintain their return when recent tax changes were taken into account.

The Office for National Statistics predicts a 8.4 million rise in the UK’s population over the next 22 years, from last year’s 65.6 million, eventually reaching 74 million in 2039, which will place more demand on the already short supply of housing. This will make it even more difficult for young people trying to get a foot on the housing ladder, and underlines the need for more privately rented homes.

Rental yields remain steady, but many buy-to-let landlords are losing confidence in their ability to rely on rental income, mainly due to recent changes in taxation. The National Landlords Association (NLA) report the proportion of landlords who are optimistic about their ability to rely on a steady rental yield has dropped from 64% in the second quarter of 2015 to just 49% in Q2 2017 – a drop of 15% in the past two years.

The total amount of Stamp Duty paid in the UK has been rising, and hit a new high of £8.3 billion in 2016. The past two years have seen a number of changes in UK property taxation, including an increase in Stamp Duty for those buying more expensive homes, and a 3% levy on top of the standard payment for Stamp Duty for those purchasing buy-to-let properties. The total amount paid by UK buyers rose by 17% in the space of just 12 months.

Buy to let mortgage competition is increasing. Research from Moneyfacts shows that the average two-year fixed BTL rate has fallen by 0.31% in one year. The number of BTL mortgage products now available has risen from 1,408 in January to 1,610 now – a rise of around 15% in six months. However, from Sept. 30, lenders will have to apply stricter standards for landlords with four or more properties, which is 89% of the mortgage deals on the market today.

Shelter says reform is necessary to reduce the number of buy-to-let landlords evicting sitting tenants when they sell – and, if they do sell with a tenant in place, to ensure the buyer doesn’t then evict the renter. They are calling for an end to “the landlord’s power to evict at any time, for any reason, outside a fixed term tenancy” and say compulsory five year tenancies with reduced or no eviction rights may be a solution.

The reasons behind ‘landlord churn’ – where 10% quit every year – are more personal, rather than with policy changes or new taxes, says Shelter. Older age and enthusiasm for being a landlord are more important factors. 35% of current landlords are over the age of 65, 13% started letting their property because they wanted to sell but couldn’t, and 12% of landlords started because they inherited the property, but may have no long-term interest.