Britain’s buy-to-let (B2L) landlords are divided over their future due to tax and market changes, with 44% of them looking to sell and just 56% planning to keep their existing properties and extend their portfolio, according to the latest research from Octopus Choice.
In the current climate, the majority of UK landlords view property as a money-making asset class, but many are of the belief that it will be on the decline in the future.
Almost a quarter of those looking to exit the field blame falling yields and tax changes, while a fifth of landlords stated that stagnant house prices are the reason for their desire to depart. Three in five said that property management had become a burden and over 60% of them undervalued the costs involved.
However, despite the hassle, some British landlords who are planning to sell their portfolios still want exposure to it as an asset class. Over a quarter of them plan to invest the money into their main property, compared to a third who want to re-invest in a different asset class or in cash.
Commenting on the findings, Octopus Choice head Sam Handfield-Jones said: “Brits still have an incessant love affair with bricks and mortar – but the hassle and cost of buy-to-let is a source of growing frustration, and some landlords may find that their once reliable day-to-day income is becoming harder and harder to come by.
“But this isn’t the case across all parts of the market, with money still to be made from the right property in the right region.”
The research from Octopus revealed that landlords in London face the toughest decision, with falling yields and slowing house price growth set to reduce profits. However, at the other end of the UK, Scottish landlords are enjoying average annual returns of 8.8% on their investment over an eight-year period, while those in the East Midlands return 8.2%.
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