One in five buy-to-let investors plan to sell up

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About 20 percent of buy-to-let investors want to sell their properties, a poll of Britain’s biggest landlord organisation has shown.

A weakening house market, stricter tax policies and increased complexity in obtaining mortgages have all made buy-to-let a less winning investment.

The new study, announced by the Residential Landlord Association – a trade body representing private sector landowners – also discovered that about half wants to raise rents over the next year.

London has been stricken the hardest by the negative circumstances weighing on the market, as high-valued property and low rental property yields are being pulled by weakening rents.

Rents dropped by 1pc in the 12 months to July in London according to data collected by peer-to-peer company Landbay.

Instead, those landowners who wish to continue invested are concentrating on other regions, including northern cities and Scotland, where the yields are much greater because of strong demand.

Outside of London, rental costs grew by 1.6pc over the UK in the 12 months to July. The highest rise, 2.4pc, happened in the east of England.

According to information from the Council of Mortgage Lenders, a number of property acquisitions by landowners in 2017 so far is a clear decline from past years.

From January to March this year, in the first time, landlords acquired only 18,100 mortgaged properties, compared to a 3-month average of 27,250 in the past two years.

Between today and 2020, landowners in the higher-rate tax section will lose their capability to offset their mortgage interest against their incomes. In result, they will have to repay income tax on their turnover, drastically reducing profits or in some cases may result in losses.

There is now also an added three percent stamp duty tax implemented to any additional house purchases beyond the main residence.

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