New data indicates that buy-to-let (BTL) landlords in the UK are planning to sell their rented properties at a rate never seen before, raising concerns about the future of the rental market.
According to polling conducted by research consultancy BVA-BDRC, a staggering 33% of private landlords in England and Wales revealed their intentions to reduce the number of properties they currently rent out during the first quarter of 2023. This figure represents an all-time high recorded by BVA-BDRC, showing a significant increase from the 20% who expressed similar plans in the first quarter of 2022.
In stark contrast, a mere 10% of landlords stated their intentions to expand their rental property portfolio.
Interestingly, this planned disinvestment comes at a time when the demand for rental properties is soaring. The research, commissioned by the National Residential Landlords Association (NRLA), disclosed that 67% of landlords reported an increasing demand from prospective tenants. Across all regions of England and Wales, over 70% of landlords indicated a surge in demand, with the East of England recording the highest levels.
The NRLA is sounding the alarm, warning that the current supply crisis will only worsen unless government action is taken. They are urging the authorities to conduct a comprehensive review of the impact of tax hikes on the sector and develop new policies that promote growth.
Additionally, as ministers prepare to abolish Section 21 repossessions, landlords are seeking assurance that legitimate reasons for terminating a tenancy, such as tenant anti-social behavior or rent arrears, will be promptly addressed by the courts. Currently, the process of obtaining possession through the courts takes an average of around six months.
Ben Beadle, CEO of the NRLA, emphasized the burden placed on renters due to the supply crisis. He called for the government to reverse the detrimental tax increases on the sector, which have discouraged landlords from providing much-needed homes to tenants. Furthermore, responsible landlords require confidence that they can efficiently reclaim their properties when justified under the upcoming changes to Section 21.
Renters are anxiously awaiting measures to address the growing supply crisis. Failure to act swiftly may result in an exacerbation of the situation in the coming year.
