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The press, however, is also a place for people to cherry-pick what it reports to suit a set agenda. It’s known as ‘spin’ – finding a different angle or shifting the emphasis to influence our perception.

A piece of positive-leaning spin was perfectly illustrated after reading a story about landlord intentions. Let’s be clear, there was no inaccuracy or ill-reporting whatsoever. Everything published was legitimate but how the Open Property team interpreted the figures was probably a little different to how the press team wanted the reader to take them.

Starting with the headline: ‘the majority of landlords do not intend to sell any buy-to-let properties’. The sentiment was derived from the results of Landbay’s latest quarterly survey. We agree it’s good news that 64% of landlords questioned were not considering selling any of their buy-to-lets in the next 12 months.

The worrying take-away when you look beyond the headline is the fact that 36% of landlords didn’t say they would keep all of their buy-to-lets in the next year. If 36% of landlords did decide to sell one or more of their properties, the private rental market would lose almost 1 million rented residences as a minimum. This figure is based on official statistics published by the Government in 2022, which showed 2.74 million landlords declared income from rental properties on a self-assessment tax form during the 2020 to 2021 financial year.

Additionally, the same Landbay survey conducted in Q1 of 2023 revealed that 79% of landlords said they wouldn’t sell any of their existing properties in the next 12 months (compared to 64% in Q2). When the two sets of survey results are laid out side-by-side, it’s clear that faith in buy-to-let is diminishing as more landlords can’t commit to keeping all their properties in the rental sector.

There was one news story from June this year that didn’t put any gloss on the current situation. The Deposit Protection Service quizzed more than 2,000 landlords about the likelihood they’ll expand their property investment portfolios to provide much-needed rental accommodation. Only 10% said they would be adding new properties.

The reluctance of landlords to retain buy-to-lets or expand their portfolios is already beginning to create news headlines of their own. Analysis by TwentyCi found the number of homes available to rent in the private sector has dropped to a 14-year low. Expressed as figures, only 241,000 private rented sector homes were available in June 2023, compared to 370,000 in June 2019.

Sadly, the shortage of rental properties coupled with rising rents is not paying dividends for landlords. Data from Cornerstone Tax highlighted how just 1-in-5 (20%) of landlords said their investment has been a profitable one in 2023, with a further 1-in-5 (20%) admitting that they have lost thousands. Zoopla followed these revelations with a headline that claimed 65,000 formerly rented properties were put up for sale in the first three months of 2023.

It's worth pointing out that the statistics and survey results that find their way into the press aren’t always an accurate measure of the lettings market. Often the sample size – that’s the number of people taking part in the research – is very small, or the questions asked are heavily weighted to benefit the company that has commissioned the survey.

Instead, the sentiment found among survey results helps people like the Open Property Group build a wider, more extensive picture of the current property market. It is our job to interpret the findings, read between the lines, use our professional judgement, analyse the Group’s historical records and dovetail this with our accurate real-time data to advise our clients.

Our latest purchasing activity does concur with some of the most recent findings, however, with landlords increasingly exiting the buy-to-let market. In the immediacy, it is rising rates – both Bank of England base and mortgage rates - that are proving to be the final straw, eroding the last of what are already very slim profits.

Other property investors are worried about how the impending Renters’ Reform Bill will affect operations, with running costs to meet landlord obligations and keep tenants safe already hugely impactful – and set to get more complex and expensive.

Both scenarios mean the Open Property Group is successfully completing on a number of ‘distressed sales’ involving landlords who need to sell property fast. If any of the news headlines are proving troubling and are forcing you to question your future in buy-to-let, our guide to making the right decision in 2023 is a must read. Take a look, then contact us to chat through your options. If your mind is already made up and leaving lettings is your preferred option, start the sale of your buy-to-let now with a free cash offer.

Published on 24th July 2023

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