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Professional Buy-to-Let Investors Downsize Portfolios

Recent analysis indicates that professional buy-to-let investors are decreasing the size of their property portfolios, with significant reductions noted particularly in Yorkshire and the Humber.

According to data presented by the Open Property Group, there has been a noticeable contraction in the size of property portfolios held by buy-to-let investors across England and Wales. Yorkshire and the Humber have experienced the most dramatic decrease, with a 27% reduction in portfolio size. Other areas such as the West Midlands and the South West have also seen substantial decreases of 19% and 13% respectively. This trend is consistent across several regions, although there are exceptions where some areas are witnessing growth.

Overall Decrease Amidst Market Challenges
The Open Property Group’s data shows that the average portfolio size for a professional buy-to-let investor now stands at 8.5 homes, down by 1.6% over the past 12 months. “Much has been made about the landlord exodus in recent times and it’s fair to say that the severity of this trend has been largely exaggerated,” says a spokesperson from the Open Property Group. “However, the figures do suggest that while buy-to-let investors may not be exiting completely, they are reducing the size of their rental property portfolios.”

Impact on Rental Yields
Despite an increase in rental prices, the analysis also highlights a decline in profit margins for landlords, particularly in the North West and central London, where the average rental yield has fallen by as much as 1%. This shrinking profitability is likely contributing to the downsizing trend among landlords, as they adjust to market conditions and economic pressures.

This reshaping of the buy-to-let landscape reflects a strategic response by investors to adapt to a changing economic environment and regulatory landscape, balancing the pursuit of profitability with the challenges of managing extensive property portfolios.


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