Landlords plan to reduce their portfolios

Landlords expect to reduce the size of their portfolios with the government’s crackdown on the buy-to-let sector, research from the Council of Mortgage Lenders has revealed.

However the CML found there was only a modest aspiration to do so – as just 5% and 11% of buy-to-let landlords expect to condense their portfolios in the next 12 months and five years respectively.

Increased buy-to-let taxation figured in 36% of landlords’ reasons to sell, compared to 13% of other landlords.

Paul Smee, CML director general, said: “While the overall findings are encouraging and offer a reassuring picture of relative stability, there is a certain irony in the researchers’ conclusions that the landlords who will be most affected by the government’s tax changes are those at the most professional end of the sector – those with large, leveraged portfolios.

“These landlords will be particularly hard hit by the changes in the treatment of mortgage interest and may choose to divest or moderate their property holdings.

“Given the government’s longstanding interest in professionalising the sector, policymakers will need to be closely attuned to the risk of unintended consequences and, indeed, own goals.”

Since the CML undertook similar research in 2004 there has been a shift towards buy-to-let landlords with just one or two properties, as detailed in the chart below.

cml-portfolio-dec-2016


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Written by: Houseladder