Landlords concerned about the UK buy to let market

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For many years, buy to let was an essential means for landlords to earn additional, or sometimes even their sole income. For most, this has been successful over the years, however many are concerned about the current and future state of the market. 

Recent reports have shown a number of troubling statistics surrounding the perceptions of landlords in the buy to let market, most notably the drop in predicted homeowners being landlords by over a quarter (27%) by the end of next year, but what is the reason for these concerns?

Worries in the market

With almost a third (31%) saying they have more worries now than they did a year ago and 28% saying it was ‘very stressful’ being a landlord, the change we have seen in recent years is quite significant in the market. 

The checklist for landlords seems to keep increasing, and with that comes stress. From the usual maintaining of property to knowing the increasing rights held by not just your tenants by yourself, there is a lot to uphold to stay within the current acceptable standards set by the Government. 

To compound this, over half (53%) said they would not have purchased property to rent had they known how regulated the private rental sector would become. With the majority (61%) blaming the increased regulations and taxes for their reason to exit the sector, is the government doing too much to deter investors?

Brexit to further dampen spirits 

A surprising result is the perceived effect Brexit will have on the property market. Almost a quarter (23%) of landlords believe it will be harder to find tenants with Brexit happening, with a similar number (25%) believing suitable rental properties will be harder to come by. 

With the introduction of the Tenant Fees Act 2019, Landlords have reason to believe there will be change in the sector with this introduction. From April, tax will also no longer be deductible for mortgage interest payments, causing further change in the market. 

What can we expect going forward?

Property investors are quite clearly frustrated by the rep tape and will be hoping that come the 2020 Spring Budget things will not only be clearer but easier for investors. 

A lot will depend on this, but for now, we expect property investors to downsize their portfolios and focus on finding ways to make their money go further with their existing property. 

Although it is good to see the UK Government acknowledge there are issues in the market, with the increase in attractiveness of alternative property investments providing investors with not only greater returns but also short-term pay-outs, there is unlikely to be much to change this trend. 

As a landlord, make sure you have investigated a comprehensive landlord insurance policy as a fallback should the tough times continue, but also taking an optimistic view. Since the date of the UK confirming it will leave the EU, activity in the market has gone up – and this may well continue.