The Nottingham Building Society research shows landlords looking to review portfolios

Nearly a million landlords plan to review their buy-to-let portfolios over the next two years with the number planning to sell outnumbering those planning to buy more properties, research from The Nottingham Building Society suggests.

36% of the landlords who took part in this research responded that they will be reviewing their portfolios. The Nottingham Building Society has used Hamptons data to calculate that this is the equivalent nationally of around one million landlords. 20% intend to sell all or some of their portfolio, whilst 16% aim to buy more properties over the next two years.

The study involved interviews with 983 UK adult homeowners, including 147 residential landlords.

The results show that regulatory issues are the biggest reason for landlords wanting to sell with 52% would-be sellers interviewed blaming increasing regulation in the sector. 24% said the end of tax relief on buy-to-let mortgages is driving them to sell.

The ability to earn a good income from buy-to-let is the main reason for landlords adding properties to their portfolios. Some 83% of those landlords interviewed who plan to buy more properties said this is a key reason for doing so, while 57% believe rising property prices make buy-to-lets a good investment. Around 61% said low interest rates for savings mean property is a better investment.

Some 11% of people surveyed with mortgages on their homes or who own them outright are thinking of becoming landlords in the next five years. Their main reason for potentially investing in a buy-to-let property is the low rates available on cash savings. 55% said they want to put their cash into property to earn a better return, while 48% see buy-to-let as a good way to diversify their investments. 42% are confident buy-to-let will generate a good income.

Denise Wells, Head of Mortgage Operations at The Nottingham, comments: “Our research suggests sellers currently outnumber buyers in the buy-to-let market with regulatory issues and tax changes among the reasons persuading landlords to pull out of the market.

“However, it remains the case that there are potentially strong returns to be earned in the buy-to-let market and we continue to see landlords buying rental properties whilst our research indicates that many more potential landlords are considering going into the market too.

“Whether landlords are buying or selling it is crucial they get the best possible advice on their finances and source the most competitive mortgages.”

The table below shows the reasons The Nottingham’s survey found as to why landlords are buying and selling.