The year to date has seen spiralling numbers of landlords selling their buy-to-let properties, as a result of regulatory changes and post-Brexit uncertainty.
A recent survey from the RLA suggests that this trend is set to continue with 22% of owners planning to sell at least one of their properties in the next year. Less than one-fifth suggested that they are planning on buying additional buy-to-let properties.
Many landlords have left the buy-to-let market following the Chancellor’s new taxation rules, including rises in Stamp Duty and reductions in mortgage interest tax relief.
So should buy-to-let landlords sell up? One leading industry peer has offered his view.
Peter Armistead, Managing Director of Armistead Property observes: ‘It is widely recognised that BTL property is a medium to long term investment. If we take a long term view, it is easy to see how property performs so well compared with other asset classes.’
‘Over the last 35 years, for which accurate house price index information is available, house prices have increased 11% per year on average. The longer landlords can hold onto property, the better.’
‘Investors that acquire property in the best BTL hotspots in the UK, can enjoy yields of between 8-12%, excellent capital growth and steady rental income. However, if landlords are experiencing poor leads or they think that the long term potential of an area is not very good, then it’s best to sell.
‘But before landlords put their property on the market, it is worth investigating if you can remortgage; raise the rent; repurpose the property into an HMO to boost yields; or renovate/refurbish it to attract different tenants. There are plenty of mortgage brokers that can provide refinancing for property portfolios, which may be much more attractive than selling up.’
‘The best time of year to sell BTL property is March-June and September-November. Ideally, landlords should sell when they don’t actually need to ie you aren’t being forced into a quick messy sale. Its best to give the property a makeover with a lick of paint, new carpets and may be a new kitchen to maximise the selling price.’