Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property118. Read the original article for full details.
Landlord Survey Reveals Widespread Plans to Sell
A recent Property118 Landlord Sentiment Survey indicates that more than two-thirds of landlords now expect to sell some or all of their property portfolio over the next three years. The number of landlords planning to leave the sector altogether is also continuing to rise, according to the report.
The survey also found that over a third of landlords expect to remortgage within the next 12 months. Many of these landlords are moving from pre-2022 fixed rates onto significantly higher repayments. Additionally, more than nine in ten surveyed no longer expect property values to outperform inflation, which could lead to stagnated or lower values over time.
Financial Pressures and Selling Challenges
The report highlights that 70% of landlords surveyed have mortgages on their properties. For those considering selling, the process can be complicated by the need to evict tenants, which may involve 6 to 12 months of costs without rental income. The article notes that landlords who wait until rent has stopped before deciding how to sell may face months of paying mortgages and other running costs on empty properties, which can erode equity.
Some landlords are choosing to sell one or two properties initially to release equity and pay off loans, giving them more time to sell the rest of their portfolio before cash flow becomes a problem. The report also points out that mistakes can occur when landlords underestimate the time, cost, and risks involved in selling rental property, especially if they rush to vacate properties without considering ongoing costs.
Implications for Letting Agents and Inventory Clerks
For letting agents and inventory clerks, these trends may result in increased activity related to property sales, tenant transitions, and property preparations. The report suggests that careful planning is essential for landlords considering leaving the private rented sector (PRS), including how and when to sell, and managing tenant arrangements during the process.
Source: Property118