Small-Scale Investors Looking to Exit Buy to Let Sector

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Small-scale investors are looking to sell and exit the buy to let sector, according to research from Simple Landlords insurance.

A new study from Simple Landlords insurance found that 30 per cent of small-scale landlords with a single property are planning to sell and exit the buy to let sector. This is likely due to the introduction of a number of measures from the government aiming to curb the growth of the sector.

There has also been a decline in the number of accidental landlords. This group made up 18 per cent of the market in 2016, dropping to 15 per cent in 2017.

These changes appear to faze experienced buy to let investors less, with this group feeling more optimistic about the sector’s growth. 38 per cent of landlords who own two or more properties are considering buying additional homes to rent.

Director of underwriting at Simple Landlords Insurance, Tom Cooper, said: ‘From Section 24 to Right to Rent, increased stamp duty, capital gains tax, regulation and licensing, you’d be forgiven for thinking it was all doom and gloom in the private rented sector. But our evidence shows there are landlords adapting to the changes and emerging like phoenixes from the ashes. We wanted to find out more about them. The research reveals it is the landlords positioned at the larger end of the market – or aspiring to get there – who are least fazed by changes, and best poised to take advantage of increasing demand, bargain stock being sold off, and stable house prices.’

Carl Agar, founder of the Home Safe Scheme and managing director Big Red House added: ‘There’s a clear difference between the big players and the dabblers, the old school landlords and the new kids on the block. Your ‘traditional’ landlord is seeing all of these new rules imposed and their returns drop. Meanwhile those new to the market are comparing those returns to what they’d get putting their money into a savings account – and it actually looks pretty good. They’re seeing opportunity, and building the rules, regulations and changes into their business model. Personally, I’m looking forward to a more professional and more prosperous private rental sector, driven by a new breed of landlord investor.’

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