One in five landlords is planning to offload properties onto the market this year. Figures from the National Landlords Association show that 19% of buy-to-let investors are planning to sell property. Of these 380,000 investors, 45% are planning to sell apartments, while 33% are looking to offload terraced properties. Only 7% of those surveyed say they plan to sell to other buy-to-let investors. This could flood the market with suitable properties for first-time buyers.

NLA CEO, Richard Lambert, says that if all these properties are sold, then there will be a significant reduction in the supply of rental properties. Although it sounds like good news for potential first-time buyers, not everyone wants to buy or is financially able to raise a mortgage – or the deposit – to get on to the property ladder. One Edinburgh landlord said that he did not think there would be buy-to-let landlords in 25 years time, but instead, new corporations would be building and managing rental properties. There are steps that landlords can take to reduce costs. This could be managing properties yourself, increasing rents and increasing any costs which are still tax-deductible. However, many landlords are ready to quit the sector because of increased tax burdens and regulations.

In an interesting discussion paper, the National Landlords Association looks at whether landlords really are making it harder for tenants to buy. The government has the mindset that everyone wants to be a homeowner. So by making life more difficult for landlords, the theory goes that they will sell up and release more properties for first-time buyers. However, the NLA report shows homeownership has fallen to a 30-year low. Today, 63% of households in England actually own their property, which is the lowest figure since 1985. The number of first-time buyers has also fallen by 20% since 2003. People living in private rentals have more than doubled since 2002 and account for 20% of households.

It isn’t landlords standing in the way of homeownership. NLA research shows 37% of renters cannot afford a deposit, while 18% cannot get a mortgage to buy a property. So it is the financial pressure which is preventing them from buying, not the fact that landlords are buying up the suitable housing stock. Also, landlords tend to invest in larger properties such as terraced or semi-detached homes, because they generally have a higher rental yield. First-time buyers, particularly single people or couples, tend to only be able to afford one- or two-bedroom properties.

The report suggests that targeting landlords is not the solution to the lack of affordable properties in the UK. It recommends that the government should be encouraging landlords to offer different tenancies, such as flexible short-term lets and longer-term leases. It also suggests that professional landlords should not be taxed out of the market. Making good landlords sell up will not make it more affordable for people to own a home. All it will do is drive up the costs for people who want decent rental properties, because of an increased scarcity of homes. Furthermore, it suggests that local authorities should be allowed to build more housing by simplifying the planning and borrowing regulations.

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