90% of landlords cite legislation and tax as main reasons for selling up
DPS report reveals that the negative tax and legislation environment are the key but not the only influencing factors on landlords’ plans to sell.
Amidst continuing supply shortages, a DPS report into the private rented sector has investigated the root causes of landlords selling up.
Matt Trevett, Managing Director at The DPS says: “Our report shows that the legislative and taxation landscapes are becoming greater influences on landlords’ thinking, with just under 90% citing laws or tax as a key reason for their intended departure.
“Rising materials costs — which have a direct impact on property maintenance prices — and the cost of buy-to-let mortgages are also affecting respondents’ plans.”
Rising materials costs and the cost of buy-to-let mortgages are also affecting respondents’ plans.”
The report found that, since May, the proportion of landlords looking to sell rental property, who said that their decision took place in the context of less potential return after tax, increased by 4% from 72% to 76%.
30% of landlords who said they intend to sell reported that concerns about declining property values had influenced their decision: up 9% since May this year to 21% but lower than the 40% who expressed the same concern in August 2023.
Mortgage costs
The cost of mortgages, though, is a lessening concern for respondents, with 46% saying they are worried about it in the most recent survey compared to 51% in May 2024 and 58% in August 2023.
The research also revealed that just under a quarter (24%) of respondents plan to sell all their properties during the next two years, up 4% since May this year, to 20% and up 2% since August 2023.
Another 23% of respondents said they planned to sell just some of their properties a 6% fall since May 2024.
The report also looked at how landlords had first entered the rental market and almost two-thirds (61%) said they had purchased all their properties to specifically use as rentals, while 30% had either inherited the property or had bought it originally as their main home.
57% said they owned one or two rentals and 38% owned between three and 10.
And 57% said the rent wasn’t their primary source of income whilst 35% said it was.
