Capital Gains Tax and the Renters’ Rights Bill regulations are pushing landlords out of the buy-to-let market, a poll from specialist lender Together found.
Some 12% of buy-to-let landlords will be offloading properties this year, with 11% planning to exit the market altogether.
When asked what the main drivers were for leaving, 14% of landlords pointed to the Capital Gains Tax burden, 12% said rising interest rates were to blame and 8% cited the headaches caused by the Renters’ Rights Bill.
This is despite the buy-to-let market having a very healthy year in 2024, as UK Finance data shows that the number of buy-to-let mortgages granted in Q4 was up by 39% compared to the same period in the previous year.
Ryan Etchells, chief commercial officer at Together, said: “Buy-to-let is a robust market and while the impact of cost pressures and wider regulatory changes is apparent, we are still seeing a healthy proportion of landlords riding out the wave and expanding their portfolios.
“There will likely be some smaller or amateur landlords who decide to sell off investments or exit completely, but in their position we are already seeing larger, professional landlords stepping in to seize diversified opportunities.
“Until the final outcome of the Renters’ Rights Bill is known, there may be a bit more volatility as landlords assess the cost impact to them and their property plans this year.
“But, on the whole it’s a changing of the guard rather than a mass exodus. A combination of more flexible BTL regulations and an agile lending sector can help landlords to manage their portfolios and ensure they are able to leverage all available opportunities – something the specialist sector is in a prime position to do.”
When asked what they consider the biggest challenges over the next 12 months, 17% of landlords pointed to the rising cost of building materials. 16% cited competition from overseas investors as well as further buy-to-let policy change from the Labour government.
Some 15% of landlords consider stamp duty increases as among the biggest challenges, and a further 15% feel the same for safety standards.
