Mortgage brokers say that more than a quarter of their landlord clients plan to sell properties as a result of the current buy-to-let environment, according to research by broker forum, Cherry.
A survey on the broker forum has revealed that 28% of landlord clients are planning to sell properties, while 39% of buy-to-let investors say they will increase rents.
Just over a quarter of landlords plan to make no changes to their investment in the current climate and only 3% intend to buy more properties.
Donna Hopton, director at Cherry, said: “Recent turbulence in the money markets has impacted all mortgage clients, but buy-to-let has arguably been hit hardest given the detrimental impact that higher rates have on stress testing and the loan sizes available to property investors.
“If you then consider the stream of regulatory and tax changes that landlords have had to deal with in recent years, combined with upcoming EPC requirements, it’s unsurprising that so many are choosing to sell properties. However, there are also millions of landlords who remain committed to the market, and it’s a market of continued demand from tenants and rising rents, so there will be plenty of opportunity for property investors.
“Set against this backdrop, brokers have an important role to play in guiding their landlord clients through this challenging period and helping them to lay down the foundations for future growth. Keeping up with current market changes can be challenging and the cherryplc.co.uk forum is a great place for brokers to stay up to date of the latest developments, share ideas and grow their knowledge.”
Mike Cook, chief mortgage officer at MFS, said: “Rising interest rates, new EPC rules and the introduction of various regulatory changes in the PRS over recent years has naturally caused some landlords to consider their options. However, we should be wary of overstating the declining appeal of buy-to-let – with huge demand from renters and long-term capital growth on offer, residential properties will continue to attract interest from a wide range of investors.
“The challenge right now is for landlords, brokers and lenders to work together for the greater good. It starts with flexible and competitive products, whether that’s bridging finance or buy-to-let mortgages. Brokers and lenders must provide landlords with access to the capital they need to purchase, renovate, refurbish and improve the EPC ratings on properties.
“This will ensure a buoyant rental market and help drive up standards. Further, by delivering choice and transparency, lenders can also help landlords navigate the dual challenges of base rate hikes and rising inflation.”
