The National Landlords’ Association (NLA) Chief Executive Officer, Richard Lambert, speaking at the Building Societies Association’s (BSA), an annual meeting of mortgage professionals, told delegates that landlords’ confidence and future business expectations is now “worse than levels witnessed during the financial crash”
The NLA’s Quarterly Landlord Panel – Q4 2015 with 1364 respondents – shows that landlords’ confidence has been shaken by recent proposed tax changes and has dropped by more than a third over the past year – it is down from 67 per cent to an all-time low of 43 per cent the NLA claim.
The NLA, which claims to be the UK’s largest landlord association, regularly surveys its member base and this latest survey leads them to the conclusion that the current level of confidence in the BTL sector is now five per cent lower than levels witnessed after the financial crash in 2007.
Mr Lambert blames the actions taken by the Chancellor in last year’s Summer Budget and his Autumn Statement which has led to the NLA and other property organisations reversing their previous predictions of the continued growth of the private rented sector (PRS) by another million more households over the next five years.
The NLA are now forecasting that if the predominately small-scale landlords surveyed follow through with their stated intentions, there will be a dramatic sell-off of 500,000 properties in the next 12 months. This could then be followed by perhaps another 100,000 every year to 2021.
The net effect the NLA is predicting could be to 136,000 properties in the private rented sector (PRS). The fall could be offset to some extent by more institutional investment in the sector, something perhaps the Chancellor is banking on..
Other findings from the survey Mr Lambert revealed were:
- The proportion of landlords looking to sell in next 12 months has more than doubled since July 2015 (up from seven per cent to 19 per cent).
- Over the next few years – 28 per cent of landlords don’t plan to purchase any more properties, 10 per cent plan to reduce their portfolio, and five per cent plan to sell up completely.
Mr Lambert said:
“Two speeches from the Chancellor in 2015 have led to a crisis in confidence greater than when all but a few BTL products were immediately withdrawn from the market following the 2007 financial crash.
“Up to half a million properties could come onto the market as a result of the Summer Budget and Autumn Statement, which the Chancellor will no doubt deem a success.
“But there is no guarantee that these will be the one or two-bedroom flats or small houses that will appeal to first time buyers, especially as landlords are more likely to offload less desirable stock in less desirable areas.
“We’ve always said that Mr Osborne is blinded to the impact of his decisions by his commitment to homeownership. He may have intended to focus on the small-scale part-time investor, but it’s the larger and more professional landlords who will be hit worst by cuts to mortgage tax relief and increases to stamp duty, and who appear most likely to leave the sector.
“What happens to the people these landlords house if they still can’t buy and there are fewer and fewer properties available to rent?”
Landlord confidence is shaken – https://t.co/e9le4Gxvcp
— LandlordZONE (@LandlordZONE) February 10, 2016