Many landlords deciding to sell up
August 6, 2008
According to a recent report an increasing number of landlords in the UK are deciding to sell up, with a number of factors thought to be responsible for this increase. The Royal Institute of Chartered Surveyors has stated that the level of new landlord instructions fell to the quarter ending October 2007. Officials from RICS also stated that amongst the factors responsible for the increase in the number of landlords selling up were higher interest rates and tighter credit conditions amongst lenders due to the credit crunch.
The level of landlords now deciding to sell up is at a three year high according to the figures. Many are concerned that other areas of the housing market could be affected by this increase in landlord property sales. The number of landlords deciding to sell their property when the lease expires has risen for three months in a row. The figure has risen to 6.5% from 6.1% and is now at its highest level since 2005 according to experts.
Recent data has also shown that the pace at which rents are rising has been slowing down, although rents are continuing to rise. Buy to let mortgages have been hugely popular over recent years, and in contrast to the 20,000 or so buy to let mortgages that were taken out when these mortgages were introduced in the mid-1990s, nearly one million of them were taken out by 2007.
Rics housing spokesman Jeremy Leaf stated: “A combination of tightening lending criteria and successive interest rate rises has started to hit the buy-to-let market.” He added that tax changes could hit the market even harder in the coming year, stating: “With the drop in capital gains tax due in April next year, many landlords will resist selling until the spring.”
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