Search Results For: buy to rent sector

Research by Foundation Home Loans has shown that a fifth of buy to let borrowers are “accidental landlords”.

14% of landlords questioned have stated that they first became a landlord through an accidental circumstance, such as marriage or relocation. Such an occurrence has resulted in these individuals being suddenly faced with a whole new industry to get to grips with, including many different rules and regulations to understand.

The research from this research shows that 9% of landlords inherited their properties. This alone brings with it certain tax related challenges to adhere to.

23% of the landlords include in the survey have stated that they became a property investor with financial gain in mind. They found the idea of becoming a landlord appealing, with 21% planning on using the money brought in from rental income to invest in their retirement plans.

21% responded that they saw being a landlord as a full time job. The largest proportion of those who responded as such are landlords in London. The response was that they recognised the on-going demand for rental properties in the area, due to the many young professionals looking to start a career in the capital and therefore wanting property close by.

60% stated that they have another full-time job alongside being a landlord, handling their rentals in between work. 19% of landlords responded that they have a part-time job.

Foundation Home Loans marketing director Jeff Knight has commented: “With so much regulation introduced into the Buy to Let market in the last few years, it could be easy for those who are unplanned landlords to make a swift exit rather than stay and navigate the red tape.

“That said, no matter how they found themselves owning rental property, it’s clear landlords are interested by the buy-to-let market for a variety of reasons and objectives, financial or otherwise.

“Considering the rental sector forms an increasingly important part of the housing mix, landlords need to be armed with the right advice.

“Our findings indicate plenty of the ‘accidental landlords’ are looking to expand their portfolios and remain invested in the market, which will ultimately have a positive impact on quality and choice for renters.”

The figure for private landlords deciding to sell their buy-to-let properties has reached a significant high in April, due to the recent tax and legislation changes, according to letting agents.

Such changes to the taxes involved with being a buy-to-let investor are reducing landlords’ margins, leaving many feeling as though they have little alternative but to leave the sector.

As conveyed by the Association of Residential Letting Agents (ARLA) Propertymark in their most recent Private Rented Sector (PRS) report, the number of landlords exiting the market has increased from 4 per branch in March, to 5 per branch in April. This is the highest level seen since records started in 2015.

With a progressive number of landlords leaving the market, the collapse of the supply of rental properties is likely to fall, at this time when demand from prospective renters has increased and more tenants are witnessing a rent climb.

Further revealed in ARLA Propertymark’s results, a gap between supply and demand is reflected. On average, letting agents registered 72 prospective tenants per branch in April, in comparison to 66 in March.

The number of tenants experiencing rent hikes increased to 26% in April. This is the highest level since September 2017, at which point 27% of landlords decided to increase their rents.

David Cox, ARLA Propertymark’s chief executive, has commented: “The barrage of legislative changes landlords have faced over the past few years, combined with political uncertainty has meant the BTL market is becoming increasingly unattractive to investors.

“Landlords are either hiking rents for tenants or choosing to exit the market altogether to avoid facing the increased costs incurred. This in turn is hitting renters most, at a time when a huge number of people rely on the rented sector, and leaves us with the question of where will these people find alternative homes?

“As demand for private rented homes massively continues to outstrip supply, the government can no longer divert its attention from the broken housing market.

“The recent news that the government is regulating the industry is a step in the right direction, but ultimately we just need more homes.”

A recent survey by Rathbone Investment Management also shows a similar result, with data revealing that 38% of participants no longer view property as a strong investment.