Up to 500,000 buy to let properties could be sold as investors’ confidence tumbles and they leave the market this year.
That’s the prediction from the National Landlords’ Association (NLA) who say that confidence among the UK’s landlords is at its lowest since the banking crisis.
The NLA points out that the number of landlords wanting to sell-up has doubled since July last year.
That’s when the Chancellor George Osborne announced his double whammy of tax hikes – removing mortgage interest tax relief for landlords and adding a 3% stamp duty surcharge on buy to let purchases.
The Chancellor said his policies were aimed at ‘creating a level playing field’ but landlords with 15 properties and more are set to avoid the penalties.
Landlords say they are not creating the problem
Now smaller landlords say they are not creating the problem that the government’s policies have been designed to tackle.
The NLA is predicting that after 500,000 properties leave the buy to let sector, there will be another 100,000 properties sold every year afterwards.
This prediction has been underlined by research from a national newspaper which found that 20% of buy to let investors are looking to sell their properties this year.
The NLA’s chief executive, Richard Lambert, said: “Around half-a-million properties could be sold because of the Chancellor’s Summer Budget and Autumn Statement.
“He may have intended to focus on part-time and small-scale investors but it’s the more professional and larger landlords which will be hit worse by the tax changes and are the most likely to leave the buy to let sector.”
Landlords are more likely to sell their less desirable homes
However, Mr Lambert also points out that landlords are more likely to sell their less desirable homes rather than properties that appeal to first-time buyers such as one and two-bedroom properties.
In a survey by the NLA, confidence by landlords in the business has fallen to 43% from 67% since last year – that’s lower than confidence levels expressed during the 2007 financial crash.
A spokesman for mortgage broker Coreco said that while there will be a large number of landlords looking to sell this year, many of them will be ‘amateur landlords’ and the prediction of a massive rush from the landlords to sell is ‘unlikely’.
Councils are cracking down on rogue landlords
Meanwhile, the Local Government Association (LGA) says that local authorities are cracking down on rogue landlords in their areas after being criticised for not utilising their legal powers.
The LGA says four councils have been successful in prosecuting rogue landlords in one month.
The organisation is now calling for a quicker legal process to bring more cases before the courts.
Indeed, two landlords who have been prosecuted recently have narrowly avoided going to jail after illegally evicting tenants from their homes by not following the legal procedure.
