- Landlords sold 300,000 more homes than they bought in the last seven years
- Higher taxes and mortgage rates are the major reasons for the mass sell-off
Buy-to-let landlords are selling up due to higher taxes, increased mortgage costs, and uncertainty about upcoming legislation aimed at the sector.
Between 2016 and the end of this year, almost 300,000 more homes will have been sold by private landlords than have been purchased, according to research by the estate agent Hamptons.
Landlords are leaving the market largely because of increased mortgage costs and a tax system that has penalised them in recent years, according to the National Residential Landlords Association.
However, uncertainty over energy efficiency requirements, alongside uncertainty about what legal changes in the Renters (Reform) Bill will mean, are also causing landlords to sell up.
So far this year, landlords sold 67,430 properties across the UK compared to 53,030 that have been purchased, according to Hamptons.
Last year 192,650 homes were sold by landlords, compared to 145,880 that were purchased. In 2021, landlords sold 201,640 properties and bought 172,060.
This suggests that the trend towards landlords opting to sell hasn’t yet become worse due to higher mortgage rates – though this could still happen as more fixed rates expire.
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Aneisha Beveridge, head of research at Hamptons International, said: ‘While we haven’t seen a mass landlord sell-off, the number of new investors buying into the sector has been muted since 2016.
‘And this is what’s causing the supply gap – there were 43 per cent fewer homes available to rent across Great Britain in July than the same time in 2019.
‘Consequently, there’s likely to be a net loss to the private rental sector this year with sales outpacing new purchases – the eighth year in a row.’
Beveridge adds: ‘We think landlords have sold 67,430 homes so far this year, and based on a total of 1million transactions taking place across Great Britain in 2023 we think that figure will likely rise to a total of 143,060 sales by the end of the year.
‘This will mean a net loss to the private rental sector of 30,550 homes in 2023 and means that landlords will have sold 297,390 more homes than they bought since 2016.’
We decided to take a closer look at the four main pressures that are causing landlords to exit the sector.
1) Higher mortgage costs
Higher interest rates mean the sums no longer stack up for many mortgaged buy-to-let investors.
The average two-year buy-to-let fixed rate mortgage currently stands at 6.63 per cent interest a year, according to financial experts Moneyfacts, up from 2.94 per cent two years ago.
For a landlord renewing a £200,000 interest-only mortgage, that is the difference between paying £490 a month and £1,106 a month.
That said, average rents have also seen growth of hundreds of pounds over the past two years. The average rent has gone from £1,029 to £1,243 a month, according to HomeLet’s Rental Index.
This will offset the higher mortgage costs for some landlords, especially those who are not on interest-only deals and therefore pay lower rates.
Chris Norris, policy director at the National Residential Landlords Association, said: ‘Landlords face increased costs on all fronts, with profits at a 16-year low.
‘Some have already seen their mortgage payments increase by almost 240 per cent over the last two years.
‘In this climate, it is no surprise that our latest research found landlords are more than twice as likely to sell up than they are to purchase properties. This will pile more pressure on a rental system already under significant strain.’
Rob Dix, co-founder of property advice website Property Hub, believes that landlords should be fairly confident that the interest rates hikes of the last year won’t be repeated.
He says: ‘When it was possible to get a mortgage for around 2 per cent, that clearly wasn’t going to continue forever – but now you can run your numbers based on costs that are a more realistic long-term norm.
‘The challenge is for anyone coming off a low fixed rate. I’d suggest reviewing your rent to make sure it’s in line with market rents: given that rents have risen so sharply, they’ll go some way to offset the difference.’
Dix adds: ‘I’d also recommend speaking to a mortgage broker as soon as possible to develop a full understanding of what your options are likely to be. Depending on your circumstances it could be higher or lower than the rates you see quoted in the press.
‘In my opinion, I think it’s likely that fixed rates have now peaked, but if the last couple of years have taught us anything it’s that you shouldn’t make predictions about these things.’
2) Tax attacks
The 2016 tax changes introduced by the then-chancellor George Osborne arguably provided the biggest sucker punch to landlords.
He introduced a 3 per cent stamp duty surcharge on second home purchases, as well as reducing the amount of tax relief landlords could claim on mortgage interest.
Landlords who own buy-to-let properties in their own name could previously deduct mortgage expenses from their rental income before tax, reducing their overall bill.
This meant a landlord with mortgage interest payments of £400 a month on a property rented out for £1,000 a month would only pay tax on £600 of that income.
However, this started to be phased out in 2017 before being stopped completely in April 2020.
Now landlords receive a tax credit instead, based on 20 per cent of their mortgage interest payments.
This means a higher rate tax-paying landlord with mortgage interest payments of £400 a month, again on a property rented out for £1,000 a month, now pays tax on the full £1,000 – but with a 20 per cent rate cut on the £400 that is being used towards the mortgage.
This is much less generous for higher-rate taxpayers, who previously received a 40 per cent tax relief on mortgage payments.
Many landlords will feel that they are an easy target for politicians and therefore may be hit with further taxes that discourage them from further investment.
Dix adds: ‘With mortgage costs rising, the inability of individual landlords to offset interest costs is going to become more of an issue over the coming years.
‘Reversing the policy will be politically unpopular, but there’s an outside chance that an incoming Government will do it when they’re a long way from the next election.
‘In terms of future changes, it wouldn’t surprise me at all to see the rate of Capital Gains Tax aligned with income tax bands.’
Howard Levy, director of buy-to-let finance at mortgage broker SPF Private Clients, says that landlords have adapted to the tax changes by buying property within a company structure, which can give tax breaks.
‘The tax changes can be seen as a positive or a negative,’ says Levy.
‘The landlord with a few properties might see this as a reason to leave the market, while others regard it as a buying opportunity with good rental properties coming to the market.
‘The taxation of own-name buy-to-lets has meant many landlords that have historically been making a profit now find themselves in the red each year.
‘Incorporating these buy-to-lets into a limited company has saved these businesses in many cases, but others have decided that providing homes for others is now something that is taxed so much as to make it unviable.’
3) Uncertainty over EPC laws
The Government consulted on plans to ensure every new tenancy in the private rented sector would be in a property with an EPC rating of at least a C by 2025. The consultation proposed that this then be extended to all private rented homes by 2028.
Despite the consultation closing more than two years ago, no Government response has been made. It is therefore important to note that these targets are currently only proposals and not the law.
At this stage the Government has said it will publish a summary of responses to the consultation by the end of the year, which is not the same as publishing an actual response.
Ultimately it means landlords are no clearer on the timeline for potential upgrades.
Dix dismisses EPC concerns as over-hyped and believes landlords needn’t worry for the time being.
‘I wouldn’t be worrying about this one at all,’ says Dix. ‘Contrary to popular belief, the requirement for an EPC grade ‘C’ still isn’t law – it’s a proposal that’s been knocking around for years, and the proposed date has already been pushed out from 2025 to 2028.
‘If you’re buying a property with a grade D or below it’s worth factoring in potential upgrade costs into your offer – especially in the current buyer’s market where you have some bargaining power.
‘But I wouldn’t consider upgrades to any of my properties until the position is much clearer.’
4) The Renters (Reform) Bill
Some landlords are being spooked by uncertainty over what the Renters (Reform) Bill will mean for them, according to the NRLA.
They particularly have concerns that the courts will continue to be slow in processing legitimate possession claims when Section 21 is ended.
The NRLA says some landlords fear they won’t be able to regain possession of their rental properties easily with a legitimate reason, such as in cases involving anti-social behaviour or extreme rent arrears.
Once again, Dix believes there is no reason to panic just yet. However, he suggests landlords bring any troublesome tenancies to an end while they still can.
‘Negative experiences with tenants, and landlords, for that matter, are far more rare than you’d be led to believe,’ says Dix, but the challenge with the Renters (Reform) Bill is that it will make those rare cases far more costly and drawn-out.
‘The Government was advised by a parliamentary committee to implement court reform before the Bill becomes law, but they’re showing no signs of doing this,’ he added.
‘It might not seem fair, and individuals can make their own moral decisions, but the rational thing for landlords to do is bring tenancies to an end now with tenants who have a patchy track record and bring in new tenants who they’ve thoroughly referenced.
‘The current competitive rental market makes it a good time to do this. There’s no mad rush though, because the Bill’s progress is slow, and the Government has said that there will be a gap between it becoming law and the implementation date for existing tenancies.’
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- The property offers sprawling views of the Norfolk coast line and salt marshes
A stunning £4.5 million five-bed house with a four-bed guest cabin nestled in an idyllic spot boasting of coastal views is up for grabs – with the lucky person able to win the property for just £10.
The beautifully designed home, complete with a swimming pool and yoga space, boasts of views of the Blakeney salt marsh and the harbour in Norfolk.
It is the latest property to be listed as part of the Omaze Million Pound House Draw. The property comes mortgage free – with all stamp duty and legal fees covered, with the lucky winner also being handed £100,000 in cash.
If the victor decides to rent it out, local estate agents estimate the property could achieve a long term annual rental value of around £60,000.
The dream property has a main house with five-bedrooms, an additional guest cabin with another four-bedrooms and a standalone office. The sprawling home provides plenty of room for entertaining spaces.
The house showcases striking modern architecture that has been meticulously designed to celebrate the nearby coastline, through its use of floor to ceiling feature windows that perfectly frame the coastal views, which can also be admired from several balconies and terraces throughout the property.
The front of the home has a large landscaped decking area that links directly to the heart of the house – the open plan kitchen, living and dining area, complete with sliding glazed doors on each side.
When opened the doors create a seamless continuation of space from the swimming pool courtyard, through the house and onto an outside terrace and dining area that overlooks the North Norfolk coastline.
The lounge, set between the ground and first floor has a large framed view out to the North Sea, while the principal bedroom has twin dressing areas and bathrooms.
The first floor also has three further double bedrooms with en-suite bathrooms and a balcony.
A wellbeing area provides a steam room, yoga space and gym with ‘Technogym’ equipment including a Treadmill and Weights System accompanied by a Peloton exercise bike – while the cinema room has been built in the ‘Everyman’ mould with acoustic walls, doors and ceiling
The guest cabin – which is attached to the main house – gives friends and family their own private quarters with a further four double bedrooms with en-suite shower rooms and the principal bedroom providing fine views over to the village and prominent village church.
All rooms have direct access to the private and enclosed gardens, with a terraced entertaining area complete with kiln fireplace.
A heated swimming pool, with the south to south-west aspect providing the ideal setting for outside enjoyment.
There is also a raised decking and an outside kitchen area with steps down to paved areas that surround the house.
The property also has a stand-alone studio building – dubbed The Hub – at its southernmost point. This can be accessed through landscaped gardens of nepeta and tall grasses, with a wildlife pond, which leads to glazed doors into an open plan area, perfect for use as an office space.
With a sitting area, meeting area and desk space, this is the ideal work from home setup, complete with a kitchen, shower room and a further room that can be used for storage.
An expanse of lawn sweeps away from the house, with wildflower areas, tall grasses and clipped hedging providing horticultural form all year round. Within the grounds is a kitchen garden, ornamental pond and easily maintained private gardens.
The house is situated close to Blakeney – a quintessential coastal village, with pretty flint cottages lining narrow streets leading down to the charming quay.
The village has excellent pubs including The White Horse and Kings Arms, a thriving delicatessen, art galleries, The Moorings fish restaurant, the renowned Blakeney Hotel and the convenience of a village store.
The picturesque market town of Holt, just over four miles away, is renowned for its boutique shopping, Byford’s delicatessen, good restaurants, pubs and further specialist and everyday shopping.
There are also banking and transport facilities within the town and a host of schools nearby.
As well as making its Grand Prize winner a multi-millionaire – the Omaze Million Pound House Draw, Norfolk – will support the RNLI – raising crucial funds to help the charity continue its lifesaving work.
The RNLI’s volunteer lifeboat crews provide a 24-hour rescue service in the UK and Ireland, and their seasonal lifeguards look after people on busy beaches.
All of the training, kit and equipment RNLI’s lifesavers need is funded by generous donations. It’s with the support of the public that the charity continues to save lives at sea.
Omaze has guaranteed a minimum donation of £100,000 and has a target of at least £1,000,000.
The draw has been launched by BAFTA winning actress, wild swimmer and RNLI Ambassador, Joanna Scanlan, whose sister-in-law is a volunteer Deputy Launch Authority at RNLI Beaumaris on Anglesey, which means she is responsible for requesting the launch of their lifeboat.
Joanna said: ‘This fabulous house in Norfolk is a truly life changing prize for one lucky winner – but more importantly, the money and awareness raised through this innovative partnership with Omaze will help the RNLI continue its lifesaving work.
‘The RNLI has saved over 142,700 lives at sea since 1824 – and everyone who enters will be contributing towards the crucial training and equipment their lifesavers need to help people who find themselves in trouble in the water – and of course one lucky person is guaranteed to win this dream home too.’
James Oakes, Chief International Officer at Omaze, said: ‘We’re delighted to be partnering with the RNLI for our latest house draw in Norfolk. By offering this stunning property, along with £100,000 in cash, we’re giving people the chance to live mortgage and rent free for the rest of their life – as well as raising money for charities whilst introducing them to brand new audiences.
‘We’re incredibly proud that the Omaze community has already raised £15,400,000 for good causes across the UK.’
In addition to winning the Grand Prize house – people who enter by midnight on Sunday August 13 will be in with the chance to win an additional life changing £250,000 in cash.
Draw entries for the Omaze Million Pound House Draw, Norfolk are available now at www.omaze.co.uk. The draw closes on Bank Holiday Monday August 28 for online entries and Wednesday August 30 for postal entries.
For full terms and conditions, see www.omaze.co.uk. No purchase necessary to enter. Over 18s and UK residents only.
- Average asking price of a home has dropped 0.2% to £371,907
- We look inside four homes around the country that are for sale for £370,000
Last month, the average asking price of a home in Britain dropped 0.2 per cent to £371,907, according to Rightmove.
With that in mind, we take a look inside four homes around the country that are listed on Rightmove with a price tag of just shy of this amount at £370,000.
They include a three-bedroom semi-detached house in the Kent seaside town of Margate, along with a three-bedroom bungalow in the market town of Northam in Devon.
If you’re looking for your £370,000 budget to go further, head north where prices tend to be cheaper and you can find a five-bedroom detached house for that price in Scotland’s East Kilbride.
Four homes for sale for £370,000…
1. Three-bed semi-detached house, Margate
This three-bedroom semi-detached house is in the Kent seaside town of Margate.
It is within a mile of Westgate-on-Sea train station and is a similar distance from the sea.
It has a price tag of £370,000 and is being sold by Miles & Barr estate agents. According to the Rightmove information, it was listed for sale at the start of May.
2. Five-bed detached house, East Kilbride
This five-bedroom detached house is in the Scottish town of East Kilbride in South Lanarkshire.
It is spread across three levels with the main living and kitchen on the first floor.
It is up for grabs for £370,000 and the sale is being handled by Home Connexions estate agents, and according to the Rightmove information, was listed at the start of June.
3. Three-bed detached house, Dilton Marsh
This three-bedroom house is in the Wiltshire village of Dilton Marsh and is perfectly suited for commuters, being less than a third of a mile from the area’s train station.
It is being sold for £360,000 via Martin & Co estate agents – with a £10,000 reduction on the property undertaken this week, according to the Rightmove details.
4. Three-bed bungalow, Northam
This three-bedroom bungalow is in the market town of Northan in Devon, north of Bideford.
There is a large living room with a fireplace and a kitchen that leads to a separate dining room.
The property is on the market for £370,000 via Webbers Property Services and was first listed in mid-June, according to the Rightmove data.
Construction of new six-star rated offices for around 1400 Beca staff leaving Pitt St for the downtown waterfront Wynyard Quayside has reached level four of eight levels.
Scott Pritchard, chief executive of Precinct Properties –
A four bedroom bungalow has gone under the hammer with a bargain guide price of £100,000 but the potential new owners will have a big clean up job on their hands.
The detached property in the picturesque village of Pant, Shropshire, comes with a guide price £180,000 cheaper than the average UK house price.
The estate agents described the home as having ‘fantastic potential’ and boasts a gated driveway, a front and back garden, a hallway, lounge, sitting area, kitchen, bathroom and shower room, as well as four bedrooms.
But it’s definitely not ideal for house hunters looking for somewhere move-in ready as the property is cluttered with rubbish.
It will go under the hammer with a guide price tomorrow and viewings are by appointment only.
The bungalow is being sold well below market value, but once potential buyers enter the door they will see why.
Although it seems like an average property at first glance from the roadside, photos show how the interior is filled with overflowing boxes of old possessions.
A bedroom with a TV lying face down on piles of clothes and bedding while another has a filthy armchair and rubbish on the floor.
The home is strewn with piles of rubbish in almost every single room and the interior is filled with overflowing boxes of old possessions.
The messy garage is almost stacked to the ceiling, which has a hole in it, with household items including a lawnmower, chairs and cardboard boxes.
Estate agents Town and Country are advertising the property as being of ‘non standard construction’ in a ‘popular location’ with a ‘large plot’ of a quarter of an acre of land.
The listing states: ‘Town and Country Property Auctions are pleased to offer this detached four bedroom bungalow of non standard construction set on a large plot of approx. 0.25 acre and offering fantastic potential for development.
‘Set in the heart of the pretty village of Pant offering all amenities.’
- A property developer who has been operating in Portland for four decades is pulling out after he was forced to take a 50 percent hit on a building
- The building had become home to homeless squatters who continued to live there even after the building was boarded up
- Kevin Howard first listed the building in January 2021 seeking $795,000 but ended up settling for just $412,000 when he sold this year
A property developer who has been operating in crime-ridden Portland for four decades says that he’s pulling out of the city because he has ‘nothing left in the tank’ after recently selling one property for nearly half its listed value.
Kevin Howard, 75, told KATU in a recent interview that the property in question had become home to squatters after the pizza restaurant that had been renting the space shuttered 2020. He listed the building in January 2021 for $795,000 but ended up selling for $412,000 this year.
‘The supposed homeless came in and kicked in the door, the front door, and lived in it. And I waited until they came out, and I had to board it up,’ Howard said.
Despite boarding up the property, Howard said the squatters were able to break-in again and resume living there.
When he called the police, Howard said the was referred to another government office, Central City Concern, but was told that they agency wouldn’t be able to do much other than provide coffee and soup for the vagrants.
The cost of a security guard was estimated to cost $15,000 per month, something that Howard couldn’t afford. Eventually, he ringfenced the building, something that took four months to organize.
‘I said, ‘Why?’ They said: ‘Because homeowners like mad are fencing their property to keep the, you know, the drug addicts and homeless out.”
With the building fenced off, trash began to pile up, Howard said. He was issued with a fine of $540 from the city, which he agreed to pay.
On top of everything else, Howard said that the city mishandled his check and issued him a new fine that included a late payment fee, coming to $640. At that point, Howard said that he was told a lien had been placed on the building.
‘I just remember the phrase ‘The City That Works.’ The city that jerks. I mean, how can you be this dysfunctional?’ City officials told the station that Howard no longer has any outstanding debts with the local government.
‘I’ve been all over the world. I lived in Australia for a couple of years. I’ve been to all 50 states and all over. I came back to Portland, and I came back to Oregon because I loved it. I loved the people, the greenery, the lifestyle,’ Howard said.
Over the past 12 months, Howard told KATU that he has spent a total of $23,000 on managing the property, including the cost of fencing as well as multiple cleanups that needed to be done on the space.
Online records show that Howard, a graduate of the University of Notre Dame, is the founder of Northwest Self Storage, which operates in three states in the region.
Howard’s story is nothing new. In September 2022,
Homelessness and crime continue to be rife in Portland. Earlier this month, officials announced that they would be removing tents that were blocking sidewalks in the city.
This came after Portland settled a lawsuit with a group with disabilities.
Lifelong residents Bruce and Rebecca ‘Becky’ Philip who told DailyMail.com that they’re ‘done with Portland’ due to the increasing number of homeless camps that have trickled into the suburbs from downtown.
‘I’ve been here 65 years but I’m done,’ Bruce Philip said. ‘I’m done with Portland.’
‘What’s there to say, they move in, take over the neighborhood, do their drugs, play their loud music, and make a mess,’ he said, adding that the homeless crisis has ruined not just a few neighborhoods, but all of Portland.
The couple also pointed out that the sweeps of the homeless camps are not the final solution and have not changed their minds about moving.
‘The city comes in and cleans it up and then two weeks later, they come back,’ Bruce Philip said. ‘It’s a vicious cycle, and I’m done.’
Local realtor George Patterson told DailyMail.com that the homeless encampments encroaching on residents’ front lawns is a topic that comes up with his clients ‘every day’, and that deals are falling through homes for sale in the area.
In one case, an early offer for a three-bedroom home asking close to $700,000 near a sanctioned homeless encampment, called Multnomah Village.
‘We had early offer on a home, but it fell through and there was some concern there with the Multnomah village site,’ Patterson said.
‘I can say [homeless encampments] are definitely affecting the property values.’
The federal class action lawsuit, filed in September, alleged that the city violated the American with Disabilities Act by allowing tents to obstruct sidewalks. The plaintiffs included a caretaker and nine people with disabilities who use wheelchairs, scooters, canes and walkers to get around. The settlement still requires approval from the City Council and the U.S. District Court in Portland.
The settlement comes as City Council prepares to consider new restrictions on camping. The updates to the city’s camping code would ban camping between 8 a.m. and 8 p.m. in many locations, including sidewalks.
Mayor Ted Wheeler plans to present the ordinance Wednesday. The City Council previously voted in November to gradually ban street camping and create at lease six large, designated campsites where homeless people will be allowed to camp.
Oregon’s homelessness crisis has been fueled by an affordable housing shortage, a lack of mental health treatment, high drug addiction rates and the coronavirus pandemic.
In Multnomah County, home to Portland, there were more than 5,000 people experiencing homelessness in 2022 — a 30 percent increase compared with 2019, before the COVID-19 pandemic, according to federal point-in-time count data.
In 2022, the city approved the release of $27 million in funding to pay for new homeless camps.
At the time of the approval, Mayor Wheeler acknowledged the measure was controversial but that he nonetheless believes in it ‘very, very deeply.’
Wheeler and other supporters of the measure contend it will make streets safer and connect homeless people with social services.
By Sarah Davidson For Mail On Sunday
21:50 17 Jun 2023, updated 21:50 17 Jun 2023
- Landlords warning finances are on brink of crisis
- Surging buy-to-let mortgage rates wiping out profits
- Lenders have withdrawn more than 275 buy-to-let deals and hiked interest rates
Landlords are warning that their finances are on the brink of crisis as surging buy-to-let mortgage rates wipe out profits and force growing numbers to sell at discounts of up to 25 per cent.
Lenders have withdrawn more than 275 buy-to-let deals and hiked interest rates by up to 1.57 per cent in just two weeks. NatWest, Santander, BM Solutions, Fleet, Mpower and Lendco were among a tsunami of firms that withdrew buy-to-let mortgages last week and repriced them at higher rates.
A landlord remortgaging now with a typical buy-to-let portfolio would see their costs more than double overnight – rising by around £1,394 a month.
The average two-year fixed rate mortgage is now 6.1 per cent, up from 5.56 per cent at the beginning of last month and 2.96 per cent two years ago, according to rates scrutineer Moneyfacts. Landlords owe around £533,000 in buy-to-let borrowing on average, typically in interest-only mortgages.
Rising costs mean that profits are quickly evaporating – and some landlords are now plunging into the red.
The average buy-to-let property in England and Wales currently generates around £12,000 a year in rental income, according to analysis from estate agent Hamptons. The latest hike in mortgage rates will see average profits fall overnight from £4,490 to £1,780 for a basic-rate taxpayer. Higher-rate taxpayers would see profits almost evaporate, leaving them with just £120 a year after mortgage payments, maintenance costs and tax. Interest rates over six per cent will plunge them into the red, according to the firm.
The increasing costs could be the final straw for hundreds of thousands of landlords, who have faced a series of blows to their business in recent years (see timeline below).
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Two years ago, landlords’ profits were hit as tax relief on their rental income was completely phased out. Last year, tougher rules were introduced for rental properties where there are multiple tenancies.
And earlier this year, plans were confirmed to ban no-fault evictions, as well as introduce strict new rules for improving the energy efficiency of rental properties. Vanessa Warwick, landlord and co-founder of Property Tribes, says the current situation is like ‘facing the four horsemen of the buy-to-let apocalypse’. She says: ‘These are rising mortgage rates, increasing taxation, increasing legislation and an economic downturn.’
Paul Shamplina, founder of Landlord Action, adds: ‘In the 32 years I’ve been working for landlords, I’ve never known their confidence to be as low as it is now.’
Why landlords are selling in their droves
David Coughlin, who runs Landlord Sales Agency, which helps landlords to sell out of the market, says that he has seen some sell their portfolios at 75 per cent of their value just to get rid of them as they are no longer financially viable now rates are rising.
‘They’re willing to do a deal just to get properties sold, says David, 53, who is based in Chester. ‘They’re more worried about getting the property sold quickly than they are about price.
‘It’s a real problem especially if you need to sell with tenants still in the property – we’re seeing landlords accept offers around ten to 15 per cent under what they could get through an agency.’ David says that half of the properties he helps landlords to sell go to other landlords who are less worried about mortgage costs. The other half are usually sold to first-time buyers. ‘Increasingly it’s companies buying up portfolios of buy-to-lets and some think that now is the time to buy.’
The rises that spell pain for tenants
Rising mortgage rates are quickly translating into higher rents for tenants. Landlords are trying to pass on their increased costs, while a falling number of buy-to-let properties means tenants are competing for a smaller pool of options.
The average rent on new rentals rose by 9.1 per cent in May compared to the previous year, according to lettings agency Hamptons. Average monthly rent hit £2,500 in London and a record high of £1,190 for the rest of the UK, according to property portal Rightmove.
Bert Habib, 54, a landlord and investor, recently let a two-bedroom flat in North London and says renters were fighting over it. ‘It was genuinely shocking,’ he says. ‘There were more than 50 tenants wanting to take it and offering crazy high rents to get it. I really feel for them but at the same time, there are landlords who can’t even cover the mortgage it’s got so bad.’
Some tenants have seen their rent raised multiple times over the past year. The rising cost of living means hundreds of thousands cannot absorb further rent rises and so landlords will struggle to pass on extra costs to them. Chris Norris, at the National Residential Landlords Association, adds: ‘In the first quarter of the year, one in three private landlords in England and Wales said they planned to cut the number of properties they rent out.
‘It’s at the highest level we have ever seen, leaving many more renters struggling to find a place to live. We need a thriving rental market to meet the needs of ever-growing numbers of people.’
Wave of remortgaging is going to hurt
Jonathan Samuels, 45, a landlord with ten buy-to-let properties, says a huge wave of landlords are going to have to remortgage this summer and many could struggle.
That’s because thousands of additional buy-to-let properties were bought to beat the stamp duty holiday, which was introduced during the pandemic and ended in August 2021.
‘In August, 2021, the average rate on a 75 per cent loan-to-value mortgage was 1.8 per cent,’ says Jonathan, who is based in West London and is chief executive of specialist lender Octane Capital.
‘Many landlords who bought before the stamp duty holiday will be coming off these deals and remortgaging on to new ones at over six per cent.’
However, Jonathan is staying in the market and believes that for landlords with a good amount of equity, the current climate represents a good buying opportunity.
‘If you’ve plenty of equity, higher rents mean it’s relatively straightforward to remortgage,’ he says.
Professional landlord and company director Bert Habib says that many landlords he speaks to are trying to get out of the market because there are too many rules and regulations for them to keep up with.
Bert, who is based in North London and owns around 30 buy-to-lets in both London and Birmingham, says: ‘I’ve been in this market for 25 years and for those of us who bought in early, it’s been a really good investment – especially because mortgage rates have been so low until recently.
‘It’s much harder for newer landlords though, as there are very few opportunities to buy where the yield is worth it.’
Increase your chance of success
Buy with plenty of equity so you’re insulated against mortgage rates rising further and build in surplus funds to cover maintenance, management costs and major improvements that could be required.
• Location is vital as there has to be demand for your type of property in that area. For example, if you want to let to students, buy in an area near the university campus where you know many students want to live.
• Be prepared to refurbish properties – you can get some cheap bargains buying at auction and charge a much better rent after you’ve done it up. Purchasing at auction is riskier as you’re buying without a survey to identify potential issues and you’ll need the finance agreed ahead or the money in the bank to secure your purchase.
• Dedicate time to knowing exactly what rules and regulations apply to you, including the ones that haven’t yet come into effect. You’ll need to factor in energy efficiency minimum standards that are due in the next five years and will require rental properties to have an EPC band C or higher.
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- We take a look at four luxury properties for sale with attractive topiary gardens
- Houses have different topiary designs and range in price from £1.85m to £4.8m
- Topiary gardens are popular with royalty as King Charles is creating a new one
One of the features that separates a luxury home from the crowd is a topiary garden, not least because you need sufficient outdoor space to create one.
They come in all different designs from intricate curved shapes found in the extensive grounds of Grade II listed mansions to more modern versions with sharp square lines.
King Charles has added his own take on a topiary garden after announcing his eco-friendly version at Sandringham House is near completion.
We take a look at four luxury properties for sale with a topiary garden, ranging in price from £1.85million to £4.8million.
Daniel Copley, of Zoopla, said: ‘A topiary adds a sense of elegance and refinement to any property and these homes currently for sale are great examples.
‘These homes also boast a wide range of other discerning features including extensive living space, swimming pools and beautifully landscaped gardens.’
1. Six-bed house, Barnham, West Sussex, £4.5m
This seventeenth century property in the West Sussex village of Barnham sits in more than six acres of landscaped gardens.
The gardens include symmetrical lawns and avenues of buxus topiary designs against a backdrop of evergreen oaks and other ornamental trees.
The Grade II listed house is for sale for £4.5million via Jackson-Stops estate agents.
2. Five-bed house, Edenbridge, £4.8m
This Grade II listed country house is found to the north of the Kent town of Edenbridge.
It has large areas of manicured lawn, parts of which are flanked by topiary and box hedges.
The property has five bedrooms and is on the market for £4.8million via John D Wood estate agents.
3. Seven-bed house, Gosberton, Lincolnshire, £1.85m
This Grade II listed Georgian Hall in the Lincolnshire village of Gosberton sits in almost nine acres of land.
The gardens include topiary yew-hedged walkways leading between rose and fruit orchards.
The property is called Cressy Hall and is on the market for the first time in 30 years. It is being sold by Savills estate agents for £1.85million.
4. Five-bed house, Hove, East Sussex, £2.5m
This five-bedroom house in Hove has a modern take on a topiary garden.
There are impeccably precise topiaried individually lit gardens and a free-flowing planter filled with a mature range of shrubbery.
It provides the picture perfect backdrop to a pristine outdoor swimming pool and a cabin that houses a bar.
The property is on the market for £2.5millionm with estate agents Fine & Country handling the sale.
The Topiary Garden at Royal Sandringham estate
A new eco-friendly Topiary Garden on the Royal Sandringham estate in Norfolk is now almost complete with all the symmetrical beds laid out and Yew trees planted.
Construction started on the garden four months ago and the once immaculate lawn on the west side of Sandringham House has since undergone a complete transformation.
The King is said to have kept a close eye on the progress of the garden.
He is creating a biodiverse formal garden with nearly 10,000 plants after requesting it when he inherited the estate at the death of the late Queen last year.
It is due to open to paying visitors to Sandringham House and its grounds later this month.
- We take a look at four luxury £1m-plus properties for sale near Windsor Castle
- Windsor Castle is an official residence of the monarch, now King Charles III
- Windsor’s appeal has easy access to the capital, Heathrow airport and the river
Windsor Castle is the longest-occupied palace in Europe and has been used by the reigning monarch since Henry I (who reigned 1100 to 1135).
With these royal connections in mind, we take a look inside four properties up for grabs near the castle.
Windsor’s appeal is not only its royal history as it has easy access to the capital – less than an hour by public transport to London – and Heathrow Airport.
It also has good schools, both private and state. Some overseas parents with children at nearby Eton College often buy property in Windsor for when they visit.
Daniel Copley, of Zoopla, said: ‘If you fancy having some regal neighbours, there are currently some beautiful properties for sale in Windsor, including a Grade II listed apartment and a spacious townhouse with a garden which provides direct access to the Long Walk.
‘Windsor itself also has a lot to offer residents including a buzzing town centre with plenty of shops and restaurants, great transport links to London and excellent schools.’
Four homes for sale near Windsor Castle…
1. Five-bed house, Windsor, £1.15m
This semi-detached Victorian house is in Windsor town centre and has a self-contained one-bedroom apartment in the basement and permit parking.
It has an asking price of £1.15million and the sale is being handled by Lawsons Residential estate agents.
2. Three-bed house, Windsor, £1.2m
This three-bedroom townhouse is spread across three floors and has an abundance of period features.
It is on the market for £1.2million and is being sold by Hardings estate agents.
3. Five-bed maisonette, Eton, £1,195,000
This five-bedroom leasehold property is in Eton, a town that is on the opposite bank of the River Thames from Windsor.
The Grade II listed building is on the market for £1,195,000 and is being sold by Romans estate agents.
4. Six-bed house, Old Windsor, £1.45m
This detached house is in a private development in Old Windsor, just a short walk to the river and has a one-bedroom annexe.
Old Windsor is part of the area where singer Sir Elton John has lived for more than 40 years.
The six-bedroom property is being sold by Hardings estate agent and has an asking price of £1.45million.