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Should Landlords Sell Their Buy-To-Let Properties in 2023?

The buy-to-let market has long been an attractive investment avenue for those seeking steady income, but the increasing burden on landlords from legislative changes, market conditions and financial burdens are causing many to sell up. We’ll explore some of those factors to help landlords make an informed decision as to whether to sell or retain buy-to-let property.

A Changing Legislative Landscape

In recent years, the regulatory environment surrounding the buy-to-let market has become increasingly stringent. Landlords face several changes:

EPC Target Changes

As part of the UK government's commitment to achieving net zero emissions by 2050, it has set new Energy Performance Certificate (EPC) targets whereby landlords must upgrade the energy efficiency in their buy-to-let properties. At present, properties need an (EPC) rating of at least 'E' to be legally let. But, starting from 2025, properties must attain a minimum EPC rating of 'C'. This rule change will initially affect new tenancies, encompassing all tenancies from 2028.

The Renters Reform Bill

The Renters Reform Bill represents the most significant potential legislative change in the private rented sector in decades. A government white paper released in June 2022 outlined the contents of the Bill, which is now going through parliament and includes:

  • Scrapping of Section 21 evictions
  • Introduction of periodic tenancies
  • Prohibition of blanket tenant bans
  • Creation of a landlord ombudsman and property portal

These changes will inevitably lead to increased costs, reduced profitability, and extra administrative burdens for landlords. So, it’s no surprise then that more landlords are selling their buy to let properties than buying.

Additional Financial Burdens

Although there are benefits of owning a buy-to-let – a steady rental income and property appreciation over time – recent financial fluctuations have meant landlords have had to bear additional burdens that impact their profitability.

Increasing Interest Rates

Rising interest rates, which are predicted to reach upward of 5% by autumn 2023, will consequently affect mortgage rates. This will hit the two thirds of landlords reliant on a mortgage, meaning those landlords planning to refinance their buy-to-let properties in 2023 should expect higher costs.

Rental Market Stability

The stability of the rental market is a significant factor to consider. Shifting economic conditions, namely the cost-of-living crisis, have resulted in financial strain for renters at a time when landlords need to put up rental prices. This can lead to high tenant turnover, which involves additional costs and expensive vacant periods.

Capital Gains Tax

Recent years have witnessed substantial appreciation in the property market, providing landlords with the opportunity for significant gains when selling their buy-to-let properties. But, the decision to sell a buy-to-let may not be as financially rewarding as expected as landlords may be subject to capital gains tax when selling a rental property for a price higher than the initial purchase cost. Changes to the tax-free allowance for capital gains tax were implemented in April 2023, whereby the allowance of £12,300 per person was replaced by a new allowance of £6,000. From April 2024, this allowance will decrease to £3,000, which means that landlords who decide to sell their properties in the new tax year might face higher capital gains tax payments.

When considering whether to sell or hold onto a buy-to-let property, landlords must assess its financial viability and evaluate their own specific circumstances. Factors such as rental income, expenses, mortgage rates, and potential returns should be carefully weighed against increasingly stringent legislative changes. For tips and advice on selling a buy-to-let property, check out


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