Barrows and Forrester’s latest research highlights just why a mass-market landlord exodus could be on the cards ahead of a potential increase in capital gains tax.
It’s been a relatively rough ride of late for buy-to-let landlords, with a three per cent increase in stamp duty tax coupled with a reduction in mortgage income tax relief, dampening the appetite for rental property investment.
Figures show that the number of landlords operating within the sector has fallen by -8% in two years, with a further 21% considering selling up or already on the market.
Largest increases in buy-to-let portfolio values
Across Britain, the average landlord’s buy-to-let portfolio consists of 1.9 properties and with the current average house price sitting at £254,525, it equates to an estimated value of £491,234. This is an increase of £38,820 in the value of their buy-to-let portfolio in just one year.
The South West has seen the most considerable uplift in portfolio value with an increase of £49,000 in the last year. The East Midlands has also seen a notable jump of £41,000 in value, with the East (+£38,000) South East (+£37,000) and West Midlands (+£36,000) also climbing considerably.
Most valuable portfolios
London still reigns supreme in terms of the most valuable landlord portfolios. With the average landlord owning two properties in the capital, the total value of their bricks and mortar investment sits just shy of £1m having climbed by £34,000 in the last year.
The South East has not only seen one of the largest annual increases in portfolio value, but at £641,093, landlords in the region are sitting on the second-highest total sum.
The East (£575,187), South West (£530,890) and East Midlands (£427,942) are also home to some of the highest buy-to-let portfolios per landlord.
Managing Director of Barrows and Forrester, James Forrester, commented:
“A sharp increases in property values brought on due to the current stamp duty holiday has caused a considerable jump in the value of buy-to-let investment portfolio up and down the nation.
However, true to form, it seems as though the government will do their best to spoil the party with an increase in capital gains tax via next month’s budget.
This is quite astounding given the string of changes already implemented to stamp duty tax thresholds and tax relief and the impact it has had on landlord numbers.
They don’t seem to understand that the buy-to-let sector is the backbone of the rental market and fewer landlords means fewer properties and even less affordable rents.
Who will provide the much needed rental accommodation if not the buy-to-let sector? Because it certainly won’t be the government, who have proved time and time again that they’re incapable of implementing any meaningful strategy where the delivery of property market stock is concerned.”
Survey of 1,100 landlords carried out by Find Out Now (10th February 2021).
|Region||Ave properties per landlord||Average house price (2019)||Current average house price||Estimated portfolio value (2019)||Current estimated portfolio value||Change £||Change %|
|East of England||1.9||£290,569||£310,912||£537,554||£575,187||£37,634||7.0%|
|West Midlands region||1.9||£198,301||£216,950||£382,721||£418,714||£35,994||9.4%|
|Yorkshire and the Humber||2.0||£165,654||£182,907||£336,278||£371,301||£35,022||10.4%|
|Sources||Gov.uk||Gov.uk||House price x av number of properties||House price x av number of properties|
|Are you planning to sell your buy-to-let portfolio before a potential increase in Capital Gains Tax?|
|I will stick with my investment||57%|
|I will wait and see what is announced||23%|
|I am considering selling||13%|
|Yes I am currently selling||8%|