Market flooded as landlords decide to sell

As buy-to-let mortgages become less and less affordable, large numbers of landlords are choosing to leave the sector and sell their properties – and this influx of sellable low-price homes are driving down prices for vendors across the country.

For many years, being a landlord has been a profitable occupation, with rental payments easily exceeding the monthly mortgage repayments. However, over the past three years, there have been a number of changes implemented by the Tory government to limit the power of those who buy-to-let a home in an attempt to make the housing market more affordable.

The changes started in 2016, when then Chancellor George Osborne chose to add an additional charge of 3% on top of their stamp duty, while also signalling a number of policies that would come into force over the next few years in regard to tax allowances.

This month, the latest of these polices became active with a reduction on the amount of tax-relief a landlord can claim at the higher mortgage rates. There will also be an additional cut in 2020, preventing landlords from being able to claim anything other than basic tax at twenty per cent.

While many landlords feel as if they being persecuted for their success, the government believes that the changes will address the larger issue of a lack of low-value housing – especially for first time buyers.

The changes put forward by George Osborne have had a huge effect on buy-to-let ownership over the last three years, with an 8% drop in buy-to-let purchases in February alone. Furthermore, many landlords have discovered that the tax hikes are too much, leaving them with little return on their investment – forcing them to sell.

“Tax bills have doubled or even trebled,” said Stephen Findlay, chief executive of investment management company Bondmason.

“I would not be surprised to see many private landlords making no income or even a loss next year.”

This news is awful for vendors who need to sell their home fast, as many more affordable properties that were previously owned by landlords are beginning to swamp the market, severely limiting national average sold house prices, as well as any profit they could hope to make. And as more and more landlords decide to sell up, the problem is sure to get even worse.

National Homebuyers have been contacted multiple times by landlords themselves who are desperate to offload their ex-rental properties but are finding it hard to find a buyer. However, it’s not just landlords who can benefit from house-buying companies, as anyone who needs to sell can enquire and be given a non-obligatory quote, regardless of the condition or location of the property.

Need to sell? Why not ask National Homebuyers for advice, as we buy any house. Call 08000 443 911 or request a call back to find out how much you could get for your property.